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Record Resolution For Drawing At One-Nanometer Length Scale

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The ability to pattern materials at ever-smaller sizes — using electron-beam lithography (EBL), in which an electron-sensitive material is exposed to a focused beam of electrons, as a primary method — is driving advances in nanotechnology. When the feature size of materials is reduced from the macroscale to the nanoscale, individual atoms and molecules can be manipulated to dramatically alter material properties, such as color, chemical reactivity, electrical conductivity, and light interactions.

In the ongoing quest to pattern materials with ever-smaller feature sizes, scientists at the Center for Functional Nanomaterials (CFN) — a U.S. Department of Energy (DOE) Office of Science User Facility at Brookhaven National Laboratory — have recently set a new record. Performing EBL with a scanning transmission electron microscope (STEM), they have patterned thin films of the polymer poly(methyl methacrylate), or PMMA, with individual features as small as one nanometer (nm), and with a spacing between features of 11 nm, yielding an areal density of nearly one trillion features per square centimeter. These record achievements are published in the April 18 online edition of Nano Letters.

“Our goal at CFN is to study how the optical, electrical, thermal, and other properties of materials change as their feature sizes get smaller,” said lead author Vitor Manfrinato, a research associate in CFN’s electron microscopy group who began the project as a CFN user while completing his doctoral work at MIT. “Until now, patterning materials at a single nanometer has not been possible in a controllable and efficient way.”

Commercial EBL instruments typically pattern materials at sizes between 10 and 20 nanometers. Techniques that can produce higher-resolution patterns require special conditions that either limit their practical utility or dramatically slow down the patterning process. Here, the scientists pushed the resolution limits of EBL by installing a pattern generator — an electronic system that precisely moves the electron beam over a sample to draw patterns designed with computer software — in one of CFN’s aberration-corrected STEMs, a specialized microscope that provides a focused electron beam at the atomic scale.

“We converted an imaging tool into a drawing tool that is capable of not only taking atomic-resolution images but also making atomic-resolution structures,” said coauthor Aaron Stein, a senior scientist in the electronic nanomaterials group at CFN.

Their measurements with this instrument show a nearly 200 percent reduction in feature size (from 5 to 1.7 nm) and 100 percent increase in areal pattern density (from 0.4 to 0.8 trillion dots per square centimeter, or from 16 to 11 nm spacing between features) over previous scientific reports.

The team’s patterned PMMA films can be used as stencils for transferring the drawn single-digit nanometer feature into any other material. In this work, the scientists created structures smaller than 5 nm in both metallic (gold palladium) and semiconducting (zinc oxide) materials. Their fabricated gold palladium features were as small as six atoms wide.

Despite this record-setting demonstration, the team remains interested in understanding the factors that still limit resolution, and ultimately pushing EBL to its fundamental limit.

“The resolution of EBL can be impacted by many parameters, including instrument limitations, interactions between the electron beam and the polymer material, molecular dimensions associated with the polymer structure, and chemical processes of lithography,” explained Manfrinato.

An exciting result of this study was the realization that polymer films can be patterned at sizes much smaller than the 26 nm effective radius of the PMMA macromolecule. “The polymer chains that make up a PMMA macromolecule are a million repeating monomers (molecules) long–in a film, these macromolecules are all entangled and balled up,” said Stein. “We were surprised to find that the smallest size we could pattern is well below the size of the macromolecule and nears the size of one of the monomer repeating units, as small as a single nanometer.”

Next, the team plans to use their technique to study the properties of materials patterned at one-nanometer dimensions. One early target will be the semiconducting material silicon, whose electronic and optical properties are predicted to change at the single-digit nanometer scale.

“This technique opens up many exciting materials engineering possibilities, tailoring properties if not atom by atom, then closer than ever before,” said Stein. “Because the CFN is a national user facility, we will soon be offering our first-of-a-kind nanoscience tool to users from around the world. It will be really interesting to see how other scientists make use of this new capability.”


Spain ‘Not Worried’ About United Ireland Joining EU

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By Catherine Stupp

(EurActiv) — Spain will not raise any objections to a statement at the European Council summit today (29 April) recognising that a united Ireland would be an EU member state, according to an EU diplomatic source with knowledge of Spain’s position in the Brexit negotiations.

The diplomat said Ireland’s case is “the opposite” of Catalonia’s bid to gain independence from Spain.

Irish Taoiseach Enda Kenny has succeeded to have a short reference inserted into the minutes of tomorrow’s summit acknowledging that a united Ireland would rejoin the EU.

“Nobody has any difficulty” with that, the diplomat said.

Ireland is a top priority in the negotiations.

The 27 EU leaders—all except UK Prime Minister Theresa May—will rubber stamp their guidelines tomorrow for the Brexit negotiations, which are expected to start in June. European Council President Donald Tusk wrote today in a letter to the 27 leaders that “people, money and Ireland must come first” in the divorce talks.

Spain’s acceptance of an easy EU accession process for a united Ireland marks a different stance compared to its opposition to an independent Scotland joining the bloc.

Spain's Mariano Rajoy. Source: Wikipedia Commons.
Spain’s Mariano Rajoy. Source: Wikipedia Commons.

Prime Minister Mariano Rajoy has previously said that Spain would block Scotland’s EU membership if it becomes independent from the UK. His government fears a Scottish referendum. Easy re-entry to the EU would give ammunition to Catalonian politicians who have promised to hold their own independence referendum by September. Rajoy insists the referendum would be illegal and Catalonian leaders will not hold it.

But Spanish Foreign Minister Alfonso Dastis recently signalled a different position, saying that Spain would “in principle” not veto an independent Scotland’s bid to become an EU member.

Under the 1998 Good Friday Agreement, Northern Ireland could vote on uniting with the Republic of Ireland. But polls since the Brexit referendum last June suggest that most people in Northern Ireland would not vote in favour.

Kenny has drawn on a comparison to the former East Germany to argue that a unified Ireland should have immediate EU membership. East Germany quickly became part of the EU after German reunification in 1990.

The comparison appears to have convinced other EU diplomats.

“It would be like being concerned about German reunification,” the diplomat said of Catalonia.

The “parallel is zero” with Catalonia because of “history, arrangements and political reality”, according to the diplomat. The UK’s acceptance of a possible referendum on Northern Irish independence—both the Republic of Ireland and the UK signed the Good Friday Agreement—marks another difference from what Spain considers an illegal vote in Catalonia.

“What is clear is that the point of departure is not only different but the opposite,” the source said.

The diplomat pointed to Ireland’s citizenship arrangement with Northern Ireland as further proof that Catalonia does not have a similar claim to break off from Spain and join the EU. Ireland offers citizenship to anyone born on the island of Ireland and people born in Northern Ireland can hold UK and Irish dual citizenship.

Spain secured a victory when the European Council’s draft guidelines for the Brexit negotiations that were made public last month specified that Spain must agree to any final deal affecting Gibraltar.

Spain and the UK both claim Gibraltar as their territory. The reference to the island in the guidelines has caused uproar in Britain.

North Korea Launches New Missile, However Test Fails

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North Korea defied world pressure and launched early Friday a new ballistic missile test. The launch is reported to have exploded not long after lifting off.

The US Pacific Command said it detected a North Korean missile launch at 5:33 a.m. local time. The ballistic missile launch occurred near the Puk Chang airfield.

The missile did not leave North Korean territory, with debris reported to have landed in the East Sea.

The North American Aerospace Defense Command (NORAD) determined the missile launch from North Korea did not pose a threat to North America.

In a tweet, US President Donald Trump said, “North Korea disrespected the wishes of China & its highly respected President when it launched, though unsuccessfully, a missile today. Bad!”

US Pacific Command reiterated that it “stands behind our steadfast commitment to the security of our allies in the Republic of Korea and Japan.”

On Thursday, US Secretary of State Rex Tillerson told the UN Security Table that, “All options for responding to future provocations must remain on the table.”

“Diplomatic and financial leverage or power will be backed up by willingness to counteract North Korean aggression with military action, if necessary,” Tillerson added.

Philippines: 6.8 Earthquake Offshore, Initially Triggers Tsunami Warning

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A 6.8 earthquake has struck south of the Philippines island of Mindanao, triggering a brief warning of “hazardous tsunami waves” for the country’s coastlines, according to the US Geological Survey and the Pacific Tsunami Warning Center.

The Pacific Tsunami Warning Center said that tsunami waves could reach 300km from the epicenter of the earthquake, which was recorded at 6.8 on the Richter scale.

Waves reaching up to 1 meter above normal tide levels are possible in the Philippines, while some coastlines in Indonesia, Malaysia and Palau could expect waves up to 30 centimeters higher than usual, the Pacific Tsunami Warning Center said.

The warning was lifted roughly an hour later, with the Pacific Tsunami Warning Center saying that “the tsunami threat from this earthquake has now passed.”

The quake, which was initially reported to be of 7.2 magnitude, struck off the coast of the island of Mindanao in the Philippines at 8:23pm GMT Friday, the US Geological Survey said. The quake was measured at a depth of 41.7 km, 31km West of Balangonan.

Syria: Chemical Weapons Allegedly Used 45 Times

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Experts from the world’s watchdog tasked with destroying chemical weapons are probing reports that toxic arms have been used 45 times in Syria since late last year, the body’s chief said Friday.

Ahmet Uzumcu, its director general, said there was “a huge list of allegations” of the use of toxic arms reported to the operations hub of the Organization for the Prohibition of Chemical Weapons (OPCW).

In the “second part of 2016, 30 different incidents, and since the beginning of this year, 15 separate incidents, so 45,” he told a reporters, brandishing a list of several pages which he chose to keep confidential.

They include the April 4 sarin gas attack on the opposition-held town of Khan Sheikhun. “All these allegations are recorded by our experts, who follow this every day from our operations center,” Uzumcu said.

“The mission, if it goes ahead, will not be an easy one. The Syrian regime had enough time to erase whatever traces were left (of the chemical attack). It will have time to do that until the watchdog arrives in Syria,” Hamdan Al-Shehri, a political analyst and international relations expert, told Arab News on Friday.

“The regime has been condemned for using chemical weapons against civilians, and this was proven by the British and the French, who conducted tests on samples taken from the victims. The question is, will there be any accountability based on the results of the new mission,” Al-Shehri added.

The OPCW is currently trying to ensure it is safe enough to deploy its fact-finding team to the town for further analysis, after Uzumcu said last week that “incontrovertible” test results from OPCW-designated labs on samples taken from victims showed sarin gas or a similar substance had been used.

The regime of Syrian President Bashar Assad has “already stated that it would support this mission, actually it has invited us to go via Damascus,” he said.

“The problem is that this area is controlled by different armed opposition groups, so we need to strike some deals with them to ensure a temporary cease-fire, which we understand the Syrian government is willing to do,” he added.

“If we can put all this together then we will deploy. The team is ready, and we have the volunteers.”

However, it is not yet mandated to also visit the Shayrat air base in the central Syrian province of Homs.

The base was the target of a US strike launched in the wake of the Khan Sheikhun attack, and Russia has called for the allegations that it was stocking chemical weapons to be investigated.

Uzumcu also confirmed that the OPCW, based in The Hague, believed Daesh terrorists had used “sulfur mustard” near Iraq’s second city of Mosul last week.

The Iraqi military said some security personnel were injured in the April 15 attack as part of the operation to recapture Mosul.

Indonesia’s Tax Amnesty – Analysis

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Indonesia’s nine-month tax amnesty programme ended in March 2017. Aside from proving itself as an effective tool in accomplishing a certain degree of tax compliance, the programme brought important lessons about future reforms.

By Santi H. Paramitha*

In June 2016, the Indonesian government officially ratified a law on tax amnesty (Law No. 11/2016) which would last effectively from 18 July 2016 to 31 March 2017. The tax amnesty programme was needed for greater tax revenue to fund infrastructure projects. This law also came on the back of allegations of Indonesian conglomerates listed in the Panama Papers as guilty of tax evasion.

More importantly, the law coincides with Indonesia’s commitment to support OECD’s initiative on the Automatic Exchange of Information in Tax Matters ratified in 2018. The tax amnesty programme offered Indonesian tax evaders tax incentives that included certain immunity from prosecution with only light penalties when they declared their domestic and/or overseas assets. Overseas assets can also be repatriated and invested in Indonesia.

Pessimism and Strong Opposition

The programme was criticised initially as a tool to advance the popularity of President Joko Widodo (Jokowi) after the government’s poor performance in its collection of tax revenue in 2015. Much to the surprise of detractors, the programme proved successful – the Indonesian government was able to achieve much of its target when the programme ended.

When initially launched by former Minister of Finance, Bambang Brodjonegoro, government personnel and economic experts were reserved in their expectations. The programme also faced strong opposition from the grassroots and religious groups.

It was targeted to receive about IDR 165 trillion (around US$12 billion) of tax revenues, IDR 4,000 trillion (around US$ 300 billion) of declared assets, and IDR 1,000 trillion (around US$75 billion) of repatriated assets. Indonesian economic experts saw the stipulated targets as too ambitious.

The Indonesian director-general of taxation admitted that it did not have precise data on the potential big taxpayers when the programme was launched. The estimated return from the tax amnesty was only based on unverified assumptions, making the targets more difficult to achieve.

A contrasting view correspondingly emerged inside the government, suggesting a lack of consultation with the Ministry of Finance as the main impediment. Vice President Jusuf Kalla mentioned that unchecked expectations towards perceived targets would jeopardise the success of the programme. A miscalculation of expected return from the tax would eventually force the government to cut the state budget once again.

In addition, labour unions and student groups had begun to organise demonstrations against the programme. Religious community also planned to file a judicial review of the tax amnesty. The programme was perceived as unfair to law-abiding citizens who pay their taxes consistently. It protected small groups of rich people who had violated the law at the expense of other taxpayers. In addition, there was a concern that the programme would encourage tax evaders to expect more amnesty in the future.

Sri Mulyani to the Rescue

Many Indonesians believe that Sri Mulyani’s current tenure as minister of finance was part of Jokowi’s strategy of utilising her prominence and track-record to dispel the negative perceptions. Although she had no part in initiating the programme, Sri Mulyani was handed the heavy task of ensuring that the tax amnesty ran smoothly.

Sri Mulyani adopted a personal touch to her approach. In September 2016, she visited the office of the second largest Muslim organisation, Muhammadiyah, to iron out the group’s plan to file a judicial review at the tax amnesty. She succeeded to reconcile Muhammadiyah and the governmentand the planned legal action was dropped.

On January 2017, she also gave a speech at a public campaign in front of members of the Indonesian Communion of Churches (PGI), scheduling another session for Muslims on the same day. Those can be seen as her brilliant manoeuvres through conducting dialogue sessions with religious groups which could create greater awareness for their followers.

Indonesia’s effort in realising its tax revenue ambitions was not only confined to the domestic domain. Sri Mulyani managed to secure the cooperation of the Singapore government in guaranteeing that Indonesians submitting to the tax amnesty programme were not coerced and would not implicate Singapore in any way. Both countries also agreed to assure that either side would not interfere in the implementation of the programme.

Achievements and Obstacles

At the end of the programme, Indonesia was reported to have successfully achieved about 121% of targeted declared assets at IDR 4,855 trillion (around US$365 Billion). However, Indonesia only achieved 81% fulfilment of tax revenues target at IDR 114 trillion (around US$8.6 Billion) and less than 15% fulfilment of repatriation of assets targeted at IDR 147 trillion (around US$11 Billion).

The main obstacle to the programme revolved around the lack of participation of the various tax registrants. Noting that repatriating assets was an option, not an obligation, many Indonesians’ decided to hold on to their assets overseas. In addition, most of the overseas assets were not in the form of liquid assets, but in properties and bonds. While these type of assets could be declared it was impossible to be repatriated to Indonesia.

Even though only one of its three targets was accomplished, Indonesia’s Tax Amnesty Programme was largely seen as a success. The government of the Philippines even claimed that it would implement the same strategy for its country in the near future.

More than Just Numbers

Looking at the impressive results of the assets declared and the tax revenues received in totality, we can say that the tax amnesty programme was successful in increasing tax compliance to a certain extent but failed in encouraging repatriation. The lacklustre performance with regard to the repatriation targets clearly suggests that the Indonesian market is not as desirable a choice for investments as it seemed.

Although the prominence of Sri Mulyani could somehow inspire public confidence towards the government, a singular programme with all its patriotic overtones is insufficient for attracting Indonesian citizens to repatriate their assets to Indonesia.

In the end, the success of the tax amnesty programme is more than just about numbers. It is about reform. Its success is not only determined by the amount of tax revenues it is able to repatriate to Indonesia, it is also judged by how greater economic reforms can be promoted along similar leanings even after the programme has ended.

The conclusion of the tax amnesty programme is thus seen as an important milestone for Indonesian policymakers. This is so that they can gather greater momentum in revitalising Indonesia’s poor tax collection record. Advocating a reform on the tax law aimed at improving administration and compliance, together with creating a promising investment climate, are the next essential steps the Indonesian government should work on.

*Santi H. Paramitha is a Research Associate at the Indonesia Programme of the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore.

Jakarta Election: Unintended Effects On NU – Analysis

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Tensions surrounding the Jakarta Election had benefited hardline groups thus widening their influence. Nahdlatul Ulama (NU) as the largest moderate Muslim organisation needs to respond to the situation by opening up inclusive collaborations with other moderate organisations.

By Satrio Dwicahyo*

Since 2014, hardline Muslim groups such as the Islamic Defenders Front (Front Pembela Islam, FPI) started to exert their influence and leadership at the provincial level in Jakarta. This development came about following the inauguration of the governorship of Basuki Tjahaja Purnama (also known as ‘Ahok’) – Jakarta’s second double minority governor who is both non-Muslim and of Chinese descent since Henk Ngantung in 1964. FPI flexed its hostile attitude towards Ahok in many ways including instigating to inaugurate a parallel governor during Ahok’s tenure.

When encountered with such a situation, moderate Muslim groups including Nahdlatul Ulama (NU) do have some influence in undermining FPI’s hold over the masses. FPI’s consistent attention on problems faced by the ummat (Muslim community) gradually won them greater support. As a result it was not a surprise that Habib Riziq Shihab, the FPI leader, was able to seize the spotlight rather easily in huge rallies organised on November and December 2016 to discredit Basuki.

Strengthening Nahdliyin Bonds: Is It Enough?

Thus, one can say that because of its outreach FPI had installed itself as an increasingly influential organisation that can exploit a political situation regardless of who wins the election or runs Jakarta. The recent victory of the duo of Anies Baswedan and Sandiaga Uno for the governorship of Jakarta had further entrenched FPI’s position. FPI’s emergence as a major player will affect the status quo of moderate Islam in Indonesia.

With around 60 million members, NU is renowned for its capability to assist the government in ironing out national issues, particularly those concerning religion. When playing such a role, NU is to a great extent dependent upon the internal cohesion of its adherents, famously known as the Nahdliyin. NU believes that one of the dominant roles of the nahdliyin is to be the vanguard of the nation’s interest as well as that of its large Muslim population.

The Nahdliyin are not officially registered and thus not tangibly identified since it is a religious stream without formal membership. Nonetheless the influence of the Nahdliyin, at least according to NU leaders, is often of paramount importance.

The religious obligation of the Nahdliyin emphasises communitarianism above other social values. Such an obligation is actually an effective tool to strengthen bonds and consensus within NU. The NU has manifested communitarianism in its relations with several types of ulama-centred congregations attended by santri – graduates of Islamic boarding schools known as pesantren. Communitarian practices within the Nahdliyin are strongly affiliated with the pesantren.

Most of these schools hailed from the rural precincts of Java. In early April 2017, NU held a grand prayer gathering (istighosah qubro) in East Java – its birthplace with the largest number of NU members. This prayer meet attracted about 500,000 attendees and had been claimed by some Nahdliyin as an act to contrast the huge rallies that took place in Jakarta. Through the mass prayer meet, NU accentuated its solidarity among followers and instituted loyalty towards the ulama.

Bringing Muslims Together: FPI’s Edge?

On November 2016, a large congregation of Muslims of various persuasions had gathered in Jakarta with the explicit demand for Ahok to be prosecuted for allegedly insulting Islam (the event was known as Aksi 411). On account of their varied ideological stances and backgrounds, these Muslim groups were typically perceived as independent bodies.

Nevertheless, the domination of FPI and Riziq Shihab as charismatic leader and solidarity maker became a point of convergence for these disparate groups. Apparently Riziq Shihab and FPI had successfully framed Ahok as the common enemy of the Muslims, causing polemical rhetoric.

Within the narrative of a common enemy, Riziq Shihab spoke a unifying language that encompasses Muslims while alienating non-Muslims. Riziq Shihab was able to maintain inter-organisational solidarity only by diverting attention to a false flag of the common enemy. With regard to Anies Baswedan and Sandiaga Uno’s victory, Riziq Shihab had reasons to be forceful in furthering FPI’s interest. It must be said that the alliance between Riziq Shihab and the winning pair of candidates stands on a common interest that benefitted both parties.

With the ability to bridge different interests, at least during the rallies, FPI had succeeded in undermining NU’s preference for internal communication and consensus with its explicit calls for demonstration. FPI also places the role of Lembaga Persaudaraan Ormas Islam/LPOI (Islamic Organisations Solidarity Board) on a pedestal, neutralising NU’s platform in playing a crucial role on intra-organisation dialogue.

FPI, NU, and the Changing Political Ground

NU’s membership is undoubtedly large. This means that the organisation enjoys a wealth of human capital. Nevertheless, recent leadership and other changes within the organisation had raised the classical question of quality versus quantity among NU members. NU needs to bridge its social capital with other moderate Muslims in order to regain its initiative from hardline groups.

Moderate Muslims, particularly members of NU, must re-examine their outlook and attitude towards FPI. It is no longer perceived solely as a fringe group that breeds vigilantism. With its history as a pressure group, FPI (and Riziq Shihab) have shown that they are fast matching, if not overtaking, NU in courting the hearts and minds of the Indonesian Muslim population. Muslims who are marginalised economically are especially more susceptible to FPI’s sway.

Currently, FPI is very much immune from counter-arguments launched by NU. Mirroring NU’s identity as a nationalist, moderate, and tolerant group, the FPI has been shrewd in its appropriation of the dominant narrative. With the Nahdliyin tradition as its basis, the FPI does not advocate for Indonesia becoming an Islamic state. In recent developments, the FPI has been maintaining such a nationalist stance so as to attract potential sympathisers who are not interested with the grandiose idea of the Islamic state.

The FPI has since garnered larger political clout among the Muslim population. NU must be able to adapt with this change and should view the promotion of religious moderation as its priority. Continuing its excellent work on intra-organisation bonding, NU should establish stronger inter-organisational ties based on its core values of moderation and tolerance.

*Satrio Dwicahyo is a Research Associate at the Indonesia Programme of the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore. This is part of a series on the 2017 Jakarta election.

South Africa: Calls For Calm In North West After Violent Protests

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South Afria’s Cabinet has called for calm following violent protests in Lichtenburg and Blydeville in Ditsobotla Local Municipality in the North West.

Schooling was disrupted, shops were looted and cars as well as several houses were burnt as residents protested over service delivery.

In neighbouring Coligny, violent protests were sparked by what residents say is the racially motivated death of a 12-year-old boy. Residents claim a farmer assaulted the boy after finding him in his maize field last Friday. Two men, aged 26 and 33, who were arrested in connection with the death of the boy, were set to appear in court on Friday.

“Cabinet appeals to the Coligny community in the North West to stop their violent protests and allow the South African Police Service to complete their investigation into the death of the child to ensure that justice is served.

“Citizens are urged to raise their concerns through existing structures and within the bounds of the law,” said Communications Minister Ayanda Dlodlo on Friday.

The Minister was speaking during a media briefing after Cabinet’s meeting on Wednesday.

North West Premier Supra Mahumapelo has appointed a team comprising five MECs and two mayors to investigate and address service delivery challenges in the area.

Vuwani

Further afield in Limpopo, there has been a recent upswing in violence in Vuwani following the decision by the Municipal Demarcation Board to incorporate it into a new municipality.

Minister Dlodlo said Cabinet strongly condemns the use of children as a negotiation tool in protests.

“The weeks of school shutdown dampens the future of these children, who are placed under additional stress. Violence, intimidation, vandalism or actions that lead to schools being destroyed or learners deprived from going to school has no place in our democracy. Cabinet emphasises that money and resources spent on replacing damaged schools was meant for other programmes.

“Cabinet acknowledged the work done by the Inter Ministerial Committee, led by the Minister of Cooperative Government and Traditional Affairs, Des Van Rooyen and the visit by Police Minister Fikile Mbalula, and endorses the view that criminal activities including damage and destruction of property will not be tolerated.”

President Jacob Zuma is scheduled to meet with VhaVenda King Toni Mphephu Ramabulana and traditional leaders from Vhembe district in a bid to bring about stability.

Durban pastor’s arrest

Minister Dlodlo also commended law enforcement agencies for arresting the Durban based pastor, who stands accused of human trafficking and sexual assault.

“Cabinet welcomes the swift actions taken by the Hawks’ Human Trafficking Unit and the South African Police Service’s Tactical Response Team, who arrested the Durban-based pastor on a charge of human trafficking in Port Elizabeth.

“It is the duty and responsibility of all South Africans to work with authorities to protect our women and children from predators and to ensure that we do our part in making our communities safer,” said Minister Dlodlo.


Military Option In North Korea Too Risky – OpEd

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As the United States considers its policy options towards North Korea it must understand that Pyongyang has been thinking about military conflict for decades. It too will have military plans and they could pose major challenges for the U.S. This is why China and South Korea–and U.S. regional experts too–prefer the diplomatic route.

By Tim Willasey-Wilsey*

As the United States strike force, led by the aircraft carrier, USS Carl Vinson, eventually arrives off the Korean coast, Washington is considering policy options. “Strategic patience” under recent presidents was an admission that all policy options had failed. It is certainly time for a new approach before North Korea is able to attach a reliable nuclear warhead to an accurate long range missile. A negotiated settlement facilitated by China is feasible and would be infinitely better than a military conflict.

The new approach will be limited by how little Washington knows about the North Korean regime. Donald Gregg, who was both CIA Station Chief, and later, US Ambassador in Seoul, once commented that “North Korea is the longest-running intelligence failure in the world”. Knowledge of North Korea’s Weapons of Mass Destruction (WMD) and missile programmes has doubtless improved since the 1990s, but the probability is that nobody understands, not even do the Chinese fully understand the Pyongyang regime’s intentions and how it might react under pressure.

Furthermore, it would be quite wrong for Washington to assume that it can dictate the timing of any military option. The North Koreans have had decades to think through their military plans. This is not always understood. A South Korean specialist on North Korea once told me that the annual “Foal Eagle” (formerly “Team Spirit”) exercises, involving the Americans and South Koreans, and the desk-top war gaming (“Key Resolve”), tend to start with an act of North Korean provocation and result in the allies winning a war within days, with the only serious debate being how far short of the northern border the allies should stop their advance to avoid alarming the Chinese government. Operational Plan 50-27 (as it is known) may underestimate Pyongyang’s ingenuity and the determination of North Korea’s huge army to resist the allies’ advance northwards. Heavy casualties could be expected on both sides.

So what do we know of North Korea’s political aims? Traditionally, going back to the days of the Great Leader Kim Il-sung, they were threefold; the unification of the Korean peninsula; the removal of all foreign forces; and regime survival. South Korean experts believe that these objectives remain broadly the same today although, in the West, most observers consider that the survival of the regime and its extensive privileges have become the overriding objective.

For much of recent history the U.S. and allied governments believed that the North Korean intention was to trade its nuclear capability for full sovereign recognition from the international community, a non-aggression pact with the U.S., and an assured supply of energy and foreign aid. But around the start of the present decade it seems that Pyongyang changed its policy. Why would it seek such a sophisticated range of capabilities–uranium and plutonium nuclear options and a suite of missiles, from short to long range, just to negotiate them away? So retaining a nuclear capability has become key to regime planning. Perhaps the Kim dynasty has learned the lesson of Saddam Hussein and Muammar Qadhafi: that if you give up your WMD capability you risk being overthrown.

WMD might be useful to gain global attention but it is hard to imagine a circumstance in which North Korea would actually use a nuclear weapon except as a last resort. Pyongyang does not wish to destroy the South because it ultimately wants Korean unity. Japan and its US bases are more tempting targets, but an attempted strike would almost certainly be intercepted and would bring about the Kim regime’s destruction. So it is likely that Pyongyang has conventional military objectives too.

There is a tendency in the West to underestimate North Korea’s conventional capabilities. This is understandable given the age of much of Pyongyang’s Soviet-era equipment. However Seoul, South Korea’s dynamic capital city of over 10 million inhabitants, provides a wealth of military opportunities for North Korea, only 45 km south of the Demilitarised Zone (DMZ) and within range of North Korean artillery. With an estimated 12,000 artillery pieces just to the north of the DMZ, Pyongyang could inflict considerable damage in the hours before the United States Air Force (USAF) and counter-batteries successfully silence them.

However, the option that most worries some South Korean officials involves irregular warfare; such as a surprise clandestine attack to take control of the governmental and commercial centres of Seoul, the two airports (Incheon and Gimpo), and other strategic locations. North Korean Special Operations Forces (SOF), from the Reconnaissance General Bureau, which numbers somewhere between 80,000 and 100,000 well trained, equipped and highly motivated troops, could employ a range of clandestine methods to reach their objectives. One of their main routes would be via the remaining infiltration tunnels under the DMZ, of which between 15 and 22 are believed to exist.

There is a long history of North Korean SOF operating in South Korea in counterfeit uniforms. Removing hostile forces from a modern city centre without incurring unacceptable levels of civilian casualties will not be easy. Seoul is no Grozny, Baghdad or Mosul. Almost all the major global companies have a presence there with significant numbers of expatriate and local staff. With employees trapped in Seoul and unable to leave the country there would be considerable pressure on Washington to de-escalate the situation.

It is little wonder therefore that South Korea favours a diplomatic solution to the North Korean problem. China also wishes to avoid the chaos of a military conflict with a mass of impoverished North Korean refugees crossing into China; nor does it want a unified Korea with U.S. troops installed in Pyongyang. Such a prospect may finally persuade the Chinese that it is time to exert intense pressure on its wayward ally. The basics of an agreement exist. China could guarantee North Korea’s survival as a sovereign state in return for internationally verified nuclear disarmament and a U.S. agreement eventually to withdraw its troops from South Korea. Few South Koreans nowadays favour unification because the costs would be ruinous; several times more than the unification of East and West Germany. A preference on all sides to explore the Chinese diplomatic option may well explain the Carl Vinson’s leisurely progress to the region.

About the author:
*Tim Willasey-Wilsey
is Senior Visiting Research Fellow at King’s College London, a former British diplomat and a member of the Chatham House Council.

Source:
This feature was written for Gateway House: Indian Council on Global Relations.

Pipeline Could Send More Natural Gas To Chicago From Western Canada

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Owners of the Alliance pipeline, one of the longest natural gas pipelines in North America, are in the early stages of assessing interest in expanding its capacity to transport natural gas from western Canada to Chicago, Illinois.

The Alliance pipeline is unique because, unlike other natural gas pipelines that only transport natural gas after it has been processed, Alliance carries unprocessed natural gas. Unprocessed, or wet, natural gas contains ethane, propane, butanes, and natural gasoline, as well as methane, the primary component of natural gas.

The Alliance pipeline currently has the capacity to carry up to 1.6 billion cubic feet per day (Bcf/d) of wet natural gas from production sites in Alberta and British Columbia in western Canada along 2,391 miles of pipeline to the Aux Sable natural gas plant liquids (NGPL) extraction and fractionation facility near Chicago. The expansion would add up to 0.5 Bcf/d of capacity, for a total throughput of more than 2.0 Bcf/d, potentially starting November 2020.

Most long-haul natural gas pipelines transport natural gas after processing, meaning that the natural gas in the pipeline has had NGPL removed and consists of mostly methane. Generally, wet gas is moved on gathering lines under low pressure that allows NGPL to remain mixed in the gas stream. Alliance is the only pipeline of its kind that transports wet natural gas prior to processing over long distances at high pressure. It accomplishes this feat by modulating pipeline pressure up to nearly 2,000 pounds per square inch to ensure that the mix of methane and NGPL does not separate while in the pipeline.

Because demand for NGPL is limited in Western Canada, the original designers of the Alliance pipeline determined that it would be economically favorable for Canadian producers to transport the growing volumes of natural gas produced in western Canada to Illinois for processing and marketing rather than to build processing facilities in western Canada and ship the liquids and dry natural gas separately.

Since 2010, the pipeline has added capacity in North Dakota to enable natural gas produced in that region to be transported to Aux Sable. The Prairie Rose lateral pipeline transports up to 0.12 Bcf/d of wet natural gas from the Palermo Conditioning Plant, and the Tioga lateral receives up to 0.13 Bcf/d of wet natural gas from the Hess Tioga natural gas processing plant.

After processing at Aux Sable, natural gas is delivered to several major interstate natural gas pipelines in the Alliance Chicago Exchange, a market hub that offers title transfer, wheeling, and park and loan services. Pipelines receiving the processed natural gas— including the ANR Pipeline Company, Natural Gas Pipeline Company of America, Midwestern Gas Transmission Company, and Vector Pipeline Company—then send it to customers in Illinois, Indiana, Ohio, and Michigan, as well as Ontario, Canada. NGPL recovered at Aux Sable are delivered to market by rail, pipeline, and direct connections to local refineries and petrochemical facilities.

The potential pipeline expansion involves a call for interest among market participants. If the level of interest is sufficient, Alliance may hold an open season for bids in fall 2017, when natural gas producers or other shippers form agreements with the pipeline company to demonstrate to regulators that, if built, the additional capacity would be used.

Malaysia Energy Profile: Strategically Located For Seaborne Energy Trade – Analysis

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Malaysia’s energy industry is a critical sector of growth for the entire economy and has accounted for nearly 20% of the country’s total gross domestic product in recent years.1

New tax and investment incentives, which started in 2010, promote oil and natural gas exploration and development in the country’s deepwater and marginal fields, energy efficiency measures, and use of alternative energy sources. These fiscal incentives are part of the country’s economic transformation program to leverage its resources and geographic location to become one of Asia’s top energy players by 2020.2

Another key pillar in Malaysia’s energy strategy is to become a regional oil and natural gas storage, trading, and development hub that will attract technical expertise and downstream services that can compete within Asia.

Malaysia, located within Southeast Asia, has two distinct parts. The western half contains the Peninsular Malaysia, and the eastern half includes the states of Sarawak and Sabah, which share the island of Borneo with Indonesia and Brunei. The country’s western coast runs along the Strait of Malacca, an important route for the seaborne trade that links the Indian and Pacific Oceans. Malaysia’s position in the South China Sea makes it a party to various disputes among neighboring countries over competing claims to the sea’s oil and natural gas resources. Although it has bilaterally resolved competing claims with Vietnam, Brunei, and Thailand, an area of the Celebes basin remains in dispute with Indonesia. Potential territorial disputes with China, Vietnam, and the Philippines could emerge as the country’s exploration initiatives move into the deepwater areas of the South China Sea.

Several major upstream and downstream oil and natural gas projects have been commissioned in Malaysia during the past few years as part of the country’s strategy to enhance output from existing oil and natural gas fields. The incumbent and long-ruling Barisan Nasional party (BN), which won the May 2013 general election, is slated to remain in power until the next election scheduled for 2018.

The BN party has a track record of promoting hydrocarbon investment, and it intends to continue boosting oil and natural gas production, reforming the energy sector to attract more investment, providing fiscal incentives to expand the use of Malaysia’s renewable energy, and developing the country’s energy infrastructure. Significantly lower oil and natural gas prices since the latter half of 2014 have negatively affected Malaysia’s export revenues and hydrocarbon investment. However, in an effort to lower its fiscal deficit, the country has reduced its energy subsidies to end users and raised economic consumption taxes in the past few years.3 Malaysia aims to diversify its fuel slate and move further downstream to become an oil and natural gas trading hub.

Primary energy consumption

Malaysia is the third-largest consumer of energy in Southeast Asia. Petroleum, natural gas, and coal are the main fuels sources consumed.

As Malaysia targets economic development and increased manufacturing, the country is focused on securing energy through cost-effective means and diversifying its fuel supply portfolio. Petroleum and other liquids and natural gas are the primary energy sources consumed in Malaysia, with estimated shares of 37% and 43%, respectively, in 2014. About 17% of the country’s energy consumption is met by coal. Hydropower contributes 1%, and renewable energy contributes 2% to total consumption (Figure 2).4 Malaysia’s heavy reliance on oil and natural gas to sustain its economic growth led the government to emphasize fuel diversification through investments in renewable energy, particularly biomass, solid waste, and solar. The power sector’s recent investment in more coal-fired power could raise the share of coal consumption in the next few years.

Petroleum and other liquids

Malaysia is the second-largest producer of petroleum and other liquids in Southeast Asia, following Indonesia. Nearly all of Malaysia’s oil comes from offshore fields.

According to the Oil & Gas Journal (OGJ), Malaysia held proved oil reserves of 3.6 billion barrels as of January 2017, the fourth-highest reserves in Asia-Pacific after China, India, and Vietnam (Figure 3).5 Nearly all of Malaysia’s oil comes from offshore fields. The continental shelf is divided into three producing basins: the Malay basin, offshore peninsular Malaysia in the western area, and the Sarawak and Sabah basins in the eastern region. About 40% of the country’s oil reserves are located in the Malay basin and tend to be light and medium sweet crude oil grades from shallow waters, although in the past decade, more exploration and discovery of reserves have taken place in deepwater areas in eastern Malaysia.6 Malaysia’s prize benchmark crude oil fields include Tapis, (located offshore Peninsular Malaysia) and Miri, Kikeh, and Kimanis (located near Borneo Island in the eastern region).

Sector organization

Energy policy in Malaysia is set and overseen by the Economic Planning Unit (EPU) and the Implementation and Coordination Unit (ICU), which both report directly to the Office of the Prime Minister. Malaysia’s national oil and gas company, Petroliam Nasional Berhad (Petronas), holds exclusive ownership rights to all oil and natural gas exploration and production projects in Malaysia, and it is responsible for managing all licensing procedures. Malaysia’s Prime Minister directs Petronas and controls appointments to the company’s board. Petronas holds stakes in most of the oil and gas blocks in Malaysia, and it is one of the largest contributors to Malaysian government revenues, accounting for more than 20% of the country’s taxes and dividends in 2016.7 Since its incorporation in 1974, Petronas has grown to be a world-renowned, integrated international oil and gas company with upstream and downstream interests in more than 70 countries.8 Petronas holds equity in all upstream production-sharing contracts (PSC).9

ExxonMobil, Shell, and Murphy Oil are currently the foreign oil companies producing the most oil in Malaysia. New opportunities for investment in Malaysia’s energy sector have attracted other foreign oil independents such as Repsol (Spain), Lundin Petroleum (Sweden), Roc Oil Company (Australia), and Petrofac (UK). In 2015, Indonesia’s national oil company (NOC), Pertamina, purchased 30% of Murphy Oil’s assets in Malaysia as Indonesia seeks to book upstream hydrocarbon production from overseas assets.10

Malaysia’s oil and natural gas policy historically has focused on maintaining the reserve base to ensure long-term supply security while providing affordable fuel to its population through subsidized fuel sales. Prior to 2015, high international oil prices and Malaysia’s increasing crude oil import levels put pressure on government expenditures for subsidies. In response, the government began introducing subsidy reforms as part of Malaysia’s goal to lower the government’s budget deficit and lift some of the financial burden on Petronas to allow the company to invest in more in upstream activities. In July 2010, the government initiated the first subsidy reductions for gasoline, diesel, and liquefied petroleum gas (LPG) with the aim of phasing out fuel subsidies by 2015. Public sensitivities over higher fuel costs stalled the reforms until September 2013, when the government increased the price of gasoline and diesel by 10.5% and 11.1%, respectively.11 In November 2014, Malaysia officially ended subsidies for gasoline and diesel.12

Exploration and production

Malaysia is Southeast Asia’s second-largest oil producer behind Indonesia. Petroleum and other liquids production (including crude oil, lease condensates, natural gas liquids, biofuels, and refinery processing gains) in 2016 was an estimated 744,000 barrels per day (b/d), a 15% increase from a recent low in 2013, but down from the country’s peak production of 842,000 b/d in 2003 (Figure 4).13 More than a quarter of Malaysian crude oil production currently originates from the Tapis field in the offshore Malay basin.14 The country’s oil production had experienced overall decline as a result of maturing fields, particularly larger fields in the shallow waters offshore Peninsular Malaysia. Since 2014, production commenced from Lundin Petroleum’s new Bertam oilfield in the Penyu Basin from and the large deepwater Gumusut-Kakap field. This production offset some production declines from mature fields and reversed some of the declines over the past decade. The combination of new fields coming online and increased investment in enhanced oil recovery (EOR) in mature fields has also kept oil production relatively steady.15

Malaysia’s domestic oil consumption has risen while production has fallen in most years since 2003, leaving smaller volumes of oil available for exports. Petronas is working to attract new investments and to reverse production declines by enhancing output from existing fields through advanced EOR techniques and developing small, marginal fields through risk-service contracts (RSCs). Companies share the risk in these contracts: Petronas is the project owner and investors are the service providers receiving revenues for oil produced throughout the entire life of the project.

International Oil Companies (IOCs) are also making new oil and natural gas discoveries in deepwater offshore areas of Sarawak and Sabah basins. These deepwater offshore fields pose more technical challenges and require greater investment by Malaysian and foreign energy firms. In 2013, Petronas announced higher spending for exploration and production activities in Malaysia’s oil and natural gas sector to boost oil and natural gas production and to offset the current declines from aging fields. However, following the oil price slump since 2014, the NOC announced cuts to capital expenditures by $11.2 billion between 2016 and 2020.16 The lower oil price environment has slowed investment in development of Malaysia’s upstream oil assets and has resulted in international oil companies abandoning a few contracts.17

Enhanced oil recovery (EOR) projectsPetronas is conducting about 10 EOR projects to extend the production life of Malaysia’s oldest oil fields. In the latter half of 2014, ExxonMobil began working with Petronas on the Tapis EOR project, which lies 118 miles off Terengganu in Peninsular Malaysia. As part of a production-sharing contract, which includes provisions for the deployment of EOR. ExxonMobil and Petronas use alternate natural gas and water injection processes to extend the life of the seven fields—Seligi, Guntong, Tapis, Semangkok, Irong Barat, Tebu, and Palas—that are part of the Tapis crude oil blend. The project is expected to extend the fields’ lives by 25 years and add up to 35,000 b/d to current production.18

In 2012, Shell and Petronas agreed to invest in EOR chemical injection technology for 30 years in two EOR projects offshore Sarawak (Baram Delta offshore covering nine fields)19 and Sabah (North Sabah development area covering three fields). In 2014, Petronas expanded the Baram Delta EOR PSC to include natural gas production, which will be used both for reinjection purposes to assist in oil extraction and for direct gas sales to the domestic and international markets.20 In 2016, Shell agreed to sell its stake in the North Sabah EOR PSC to Malaysia’s Hibiscus Petroleum.21

Risk service contracts (RSC) projectsIn addition to its EOR projects, Malaysia began maximizing its oil production potential in 2011 by issuing risk-service contracts for smaller, marginal fields. Petronas estimates that Malaysia has more than 100 marginal fields with about 580 million barrels of oil reserves.22 These contracts involve risks shared between Petronas (the project owner) and the contractors (foreign and domestic companies), which act as service providers. These companies receive compensation for cost and a return on investment.

Petronas has awarded six RSCs since 2011 as part of its RSC licensing rounds. At the end of 2016, five of the six RSCs had commenced production of oil and natural gas, including the Berantai fields, the Kapal, Benang, and Meranti Cluster located offshore Peninuslar Malaysia, and the Balai Cluster located offshore Sarawak.23 These fields were producing more than 30,000 b/d in 2014.24 As a result of the low oil price environment, the first two RSCs awarded in 2011 (Barantai and Balai Cluster) were discontinued in 2016.25 The sixth RSC, the Ophir oil field offshore Peninsular Malaysia, is slated to start production by the second half of 2017.26

Deepwater projectsSeveral major projects are under development in the deepwater area offshore the Sabah state that could bolster Malaysia’s oil production over the next decade. The Kikeh oil field, operated by Murphy Oil in partnership with Petronas, was Malaysia’s first deepwater oil-producing field. The Kikeh field came online in 2007 with peak production potential at 120,000 b/d. However, estimated production in 2015 was only 15,000 b/d. The Siakap North-Petai field is a satellite field commissioned in 2014 to tie back to the Kakap field. It has a peak production rate of 35,000 b/d, which will offset some production declines from Kakap.27

Another deepwater area offshore Sabah, the Gumusut-Kakap project, uses the region’s first deepwater floating production system. The Kakap field came online in 2012 with production of 25,000 b/d. New production from the Gumusut field, which commenced in late 2014, has been the key driver in crude oil production growth in Malaysia following more than a decade of overall declines. Currently, output from both fields has averaged 100,000 b/d to 120,000 b/d and could peak around 135,000 b/d.28 Project shareholders are Shell (33%), ConocoPhillips (33%), Petronas (20%), and Murphy Oil (14%). The system is connected via pipelines to the new Sabah Oil and Gas Terminal located onshore at Kimanis, Malaysia.29

The Malikai oil and gas field is another deepwater find located offshore northwestern Sabah and has a peak production capacity of 60,000 b/d. Shell, the operator and a 35% stakeholder, brought Malikai online at the end of 2016. Other project partners include ConocoPhillips (35%) and Petronas (30%). The Malikai project uses a tension-leg platform and other advanced offshore drilling technologies.30

Boundary disputesMalaysia are cooperating with neighboring countries bordering the South China Sea (SCS) to exploit the area’s significant hydrocarbon potential. The country holds estimated reserves of 5 billion barrels of crude oil and liquids and 80 trillion cubic feet of natural gas in the SCS, the largest of any of the border countries (see South China Sea Analysis Brief). In May 2009, Malaysia submitted SCS territorial claims to the United Nations Commission on the Limits of the Continental Shelf. Malaysia currently disputes China’s territorial claims through its nine-dash line, a series of lines encompassing most of the South China Sea based on China’s historical territorial claims. Malaysia has not filed a legal case against China and has preferred to advance bilateral relations between the two countries.

The 20-year dispute between Malaysia and Brunei over land and sea boundaries, particularly in the Baram Delta Basin, was resolved when the two countries signed a boundary agreement in April 2009. Oil blocks L and M were ceded to Brunei, while Limbang, on the Sarawak-Brunei border, was ceded to Malaysia. Since the agreement, energy cooperation between Malaysia and Brunei has strengthened. In 2010, Petronas and the Brunei government agreed to jointly develop the two blocks offshore Borneo Island, and they signed a 40-year PSA for newly-named Blocks CA1 and CA2. Drilling commenced in 2011, along with further investment plans. The two countries signed several energy cooperation agreements in 2013 for joint development of deepwater fields, and they anticipate hydrocarbon production in the joint commercial areas to begin by 2021.31

Malaysia and Vietnam had a maritime dispute in the Gulf of Thailand that stemmed from claims made in the 1970s. Based on 1992 negotiations, both countries’ national oil companies created a joint development agreement to extract the resources.32 Malaysia and Vietnam share the 775-square mile area of the PM-3 Commercial Arrangement Area (CAA) in the Malay Basin. PM-3 CAA, which consists of six fields, commenced oil and natural gas production in 1997. The production capacity of these fields is currently 60,000 b/d. Spain’s Repsol, through its 2015 purchase of Talisman Energy (Canada), holds a 35% stake and an operating interest in the Northern and Southern oil fields in the CAA. The other PSC partners—Petronas and PetroVietnam—hold a 35% and a 30% interest, respectively.33 The project partners extended the PSC for the block to 2027.34

Other areas in the South China Sea, such as the Celebes Basin that borders Indonesia and Malaysia, have remained underexplored because of competing territorial claims between the two countries. Shell holds an exploration contract with Petronas for two deepwater blocks off the east coast of Sabah. However, Indonesia also awarded separate PSCs for the blocks and claims them.35 These PSCs will likely be dormant as long as territorial maritime disputes remain unresolved.

Oil pipelines

Malaysia has a relatively limited oil pipeline network and relies on tankers and trucks to distribute products onshore. Malaysia’s main oil pipelines connect oil fields offshore Peninsular Malaysia to onshore storage and terminal facilities. The Tapis pipeline runs from the Tapis oil field and terminates at the Kerteh plant in Terengganu, as does the Jerneh condensate pipeline. The oil pipeline network for Sabah connects offshore oil fields with the onshore Labuan oil terminal. This network is currently expanding following the recent launch of development projects including the Kebabangan cluster, the Malikai, Gumusut/Kakap, and Kikeh oil fields. A few other oil pipelines connect offshore fields with the onshore Bintulu oil terminal in Sarawak.

An international oil-products pipeline runs from the Dumai oil refinery in Indonesia to the Melaka oil refinery in Melaka City, Malaysia. An interconnecting oil-products pipeline runs from the Melaka refinery via Shell’s Port Dickson refinery to the Klang Valley airport and to the Klang oil distribution center.

Oil trade

Malaysia remained a net oil exporter of crude oil and petroleum products in 2016 despite the narrow gap between production and consumption in the past several years. Malaysia exports about half of its crude oil production because the crude quality (light and sweet) is attractive to the Asian markets and fetches a higher premium compared with other crude oil blends. Malaysia imports lower-cost heavy sour crude oil, about half from the Middle East and the rest from several other regions, for its refineries and domestic needs. In 2016, Malaysia imported nearly 200,000 b/d of crude oil for processing at its oil refineries.36

Malaysia exported an eight-year high of 333,000 b/d of crude oil in 2016. Almost all of Malaysia’s crude oil exports are shipped within Asia Pacific, the bulk of which were sent to Australia, India, Thailand, Singapore, and Indonesia.37 Japan purchased more crude oil from Malaysia to use for power generation following the loss of nuclear electric generation after the country’s Fukushima accident in 2011, although these export volumes have now returned to pre-Fukushima levels.

The country’s imports of petroleum products have grown faster than its exports in the past few years because of weaker oil demand in other parts of Asia. Much of Malaysia’s oil product trade occurs within Asia, especially with neighboring Singapore. Gasoline is the key import product, making up about 46% of petroleum product imports and about 20% of all oil product demand. Malaysia exports about half of its diesel production.38 Malaysia’s oil demand slowed in 2015 and 2016 as a result of weaker economic growth and competition with other fuels such as natural gas and coal.

Refining, storage, and transit terminals

Malaysia invested heavily in refining activities during the past two decades and can now meet most of its demand for petroleum products with domestic supplies. According to Facts Global Energy (FGE), Malaysia has around 600,000 barrels per day (b/d) of refining capacity at six facilities (Table 1).39

As part of Malaysia’s goal to compete with the oil refining and storage hub in Singapore, Petronas plans to build a refining and petrochemicals integrated development project (RAPID) in Johor, located at the southern tip of Peninsular Malaysia. This project includes a 300,000 b/d refinery that the industry expects will turn Malaysia from a net oil product importer to a net oil product exporter once it is operational. The project has incurred several delays, although Petronas made a final investment decision in 2014. The company began project construction soon after. In early 2017, Saudi Arabia’s major oil company, Saudi Aramco, purchased a 50%-stake in the refinery for $7 billion, which will help Petronas bring the refinery online in 2019. As part of the deal, Saudi Aramco is slated to supply up to 70% of the crude oil required by the facility.40 The RAPID facility will be the country’s first refinery to process diesel and gasoline that meet the Euro V standard, which lowers emission levels.

Malaysia is expanding its oil terminal and storage capacity as the need for more oil storage and trading grows within Asia, and as its neighbor, Singapore, lacks the space to continue increasing its storage capacity. Most of Malaysia’s oil product and crude oil terminals are located along the eastern coast of Peninsular Malaysia and offshore as floating storage and production facilities. Malaysia is constructing several projects with a capacity of 34 million barrels in the next few years.41

Malaysia is developing several storage terminals in Johor, adjacent to Singapore. Malaysia International Shipping Corporation (MISC), and global oil trader, Vitol Group, expanded the storage capacity at the new ATT Tanjung Bin Terminal in mid-2015 to 7.3 million barrels.42 The new Pengerang oil storage terminal in Johor is Malaysia’s largest commercial oil storage facility. The facility is owned by a joint venture of Vopak (Dutch) and of Dialog Group (Malaysia) and has a storage capacity of more than 8.2 million barrels to house crude oil and oil products. The first phase began operations in 2014.43 A second phase is under construction with another 13 million barrels of oil storage capacity expected by 2019.44 This terminal bolstered southern Malaysia’s oil storage capacity by 70% to nearly 20 million barrels following the first phase.45

In Malacca, Malaysia began construction on the Kuala Linggi International Port oil facility, operated by T.A.G. Marine, in 2016. The port complex will have a capacity of more than 9 million barrels of oil.46

As part of Petronas’ plan to invest in upstream and downstream activities in the Sabah state, the NOC commissioned the Sabah Oil and Gas Terminal (SOGT) in Kimanis, Sabah in 2014. SOGT acts as a central hub for much of the hydrocarbon development in offshore Sabah from new fields coming online recently—Gumusut/Kakap, Kikeh, and Malikai. The terminal has a design capacity to process 300,000 b/d of crude oil and 1.25 billion cubic feet per day (Bcf/d) of natural gas. The terminal has a storage capacity of 11.3 million barrels of oil.47

Table 1. Malaysia’s existing and planned refineries
Refinery Operator Capacity
(b/d)
Notes
Existing refineries
Melaka 1 (PSR-1) Petronas 88,400 Distills sweet crude oil and condensate
Melaka 2 (PSR-2) JV of Petronas and ConocoPhillips 158,100 Processes sour crude oil grades
Port Dickson Malaysia Hengyuan International Ltd. (China) 135,000 Supplies solely domestic market; can accept heavier crude oil grades
Port Dickson San Miguel/Petron (Philippines) 79,100
Kertih Petronas 112,800 Processes naphtha condensates through a splitter
Kemaman Kemaman Bitumen Company 23,300 Converts heavy crude oils to bitumen
Planned projects
RAPID Petronas 300,000 Financial Investment Decision: April 2014. Operational: 2019
Sources: FACTS Global Energy, Petronas, Reuters.

Natural gas

Malaysia was the world’s third-largest exporter of liquefied natural gas (LNG) after Qatar and Australia in 2016. The country’s growing domestic demand and regional gas imbalances in the past few years prompted the country to open its first regasification terminal as another supply source.

According to the OGJ, Malaysia held 42 trillion cubic feet (Tcf) of proved natural gas reserves as of January 2017, and it was the fifth-largest natural gas reserve holder in the Asia-Pacific region (Figure 5).48 More than half of the country’s natural gas reserves are located in its eastern areas, predominantly offshore Sarawak. Sarawak and Sabah have an increasing amount of non-associated gas reserves that have offset some of the declines from mature oil and natural gas basins offshore Peninsular Malaysia.49

Sector organization

Similar to the oil sector, Malaysia’s state-owned Petronas dominates the natural gas sector. The company has a monopoly on all upstream natural gas developments, and it also plays a leading role in downstream activities and the liquefied natural gas trade. Most natural gas production comes from PSAs operated by foreign companies in conjunction with Petronas. Shell remains the largest gas producer and a key player in the development of deepwater fields in Malaysia.50 Other international companies that have sizeable upstream investments in Malaysia’s natural gas fields include Murphy Oil, ConocoPhillips, Nippon Oil, INPEX, and Mitsubishi.

Gas Malaysia is the largest non-power natural gas distribution company in Malaysia and the only one that can operate on Peninsular Malaysia. Sarawak Gas Distribution Company, which is 70%-owned by the government, serves Sarawak gas consumers, and Sabah Energy Corporation distributes natural gas in the Sabah state.

The Malaysian government has regulated natural gas prices for end users. Historically, it has capped the domestic rates at a levels considerably below imported LNG and prices paid by neighboring Singapore. The Malaysian government has provided subsidies to Petronas and power producers. Overall, the artificially low natural gas prices in Malaysia have increased the government deficit, inhibited some upstream investment by Petronas, and increased domestic demand. In efforts to reduce natural gas subsidies and raise investment, the government implemented a price reform in 2011. The policy seeks to raise the natural gas price for electric power users every six months to bring domestic natural gas prices closer to prices in the international market.

Although it took no action for more than two years, in January 2014, the government began to raise natural gas prices for all consumers. By early 2017, the price had risen by 44% for electric power customers and by 68% for industrial and commercial customers over the previous three years.51 Between 2014 and the end of 2016, the concurrent fall in Malaysian LNG prices by about half to less than $6 per million British thermal units has significantly narrowed the gap between domestic and international gas prices. The government intends to further ratchet up the natural gas tariff for non-power consumers every six months until 2019, which is expected to result in a 23% increase from the January 2017 level.52

Exploration and production

Malaysia’s dry natural gas production has risen steadily over the past two decades, reaching 2.2 Tcf in 2015. The Malaysian government estimates 2016 production rose to nearly 2.4 Tcf in 2016 as a result of projects that have come online in the past two years. Meanwhile, domestic natural gas consumption, which accounts for roughly 50% of production, has also increased over the past decade, but at a slower pace (Figure 6). In 2014, the power sector accounted for 62% of natural gas consumption, and the industrial sector accounted for 37%, according to Malaysian statistics. The remaining use was from residential, commercial, and transportation sectors.53

Demand for natural gas-fired power, especially in Peninsular Malaysia, decreased in 2015 as a result of the reductions in price subsidies and the subsequent increase in coal usage as a cheaper source of energy. This drop is expected to be a near-term phenomenon because Malaysia’s coal capacity eventually cannot support the rising energy demand and environmental commitments. As a result, natural gas power demand is expected to increase again. However, gas demand for industrial development is likely to remain strong going forward as the government pursues greater economic development.54

Rising domestic energy demand, particularly in Peninsular Malaysia, and LNG export contract obligations are placing pressure on the country’s gas supply and driving Malaysia to actively seek investments for reservoir development. Several ongoing projects will expand natural gas production in Malaysia over the near term. Exploration and development activities in Malaysia continue to focus on offshore Sarawak and Sabah. Over the long term, Malaysia needs to attract higher levels of investment and technical capabilities to develop deepwater fields and those containing high levels of carbon dioxide and sulfur.

Malaysia-Thailand Joint Development AreaOne of the most active and prolific areas for natural gas exploration and production is the Malaysia-Thailand Joint Development Area (MTJDA), located in the lower part of the Gulf of Thailand and the northern part of the Malay Basin. The area is divided into three blocks, A-18, B-17, and C-19, and is administered by the Malaysia-Thailand Joint Authority (MTJA), with each country owning 50% of the MTJDA’s hydrocarbon resources. According to the MTJA, 27 natural gas fields were designated by 2014, including nine fields each in Block A-18, Blocks B-17 and C-19. Production at Block A-18 started in 2005 and has a contracted level of about 290 billion cubic feet per year (Bcf/y) of processed natural gas. Block B-17 and Block C-19 came online by 2010. From 2010 to 2026, Blocks B-17 and C-19 are contracted to deliver 120 Bcf/y for the first 10 years then 90 Bcf/y for the remaining 6 years. Overall, average natural gas production from MTJDA was slightly higher than 400 Bcf/y in 2015 and 2016.55 Block B-17-01 is expecting development of its gas fields in 2017, with first gas deliveries in 2018.56 MTJA continues to explore the area to discover more hydrocarbons.

Projects in Sarawak and SabahMost of Malaysia’s natural gas production is offshore Sarawak and supports LNG exports from Bintulu. Petronas and other oil companies have made several discoveries of natural gas reserves since 2010 and commenced production from several fields, offsetting some of the declining production from mature gas basins in Peninsular Malaysia and in the shallow water blocks in Sarawak. Historically, Shell and Petronas have been the key developers of upstream assets supplying the MLNG liquefaction terminals. Shell and Petronas signed three more oil and gas PSCs with Petronas in 2012 and stepped up drilling efforts to continue developing natural gas and condensate production offshore Sarawak. The PSCs cover blocks SK319, SK318, and 2B in the Central Luconia Basin.57

Two natural gas fields in Sarawak (NC3 in block SK316 and Kanowit field in block SK306) began production to serve as feedstock gas for the new liquefaction terminals commissioned in 2017. Block SK316 holds three key fields that will supply the newly commissioned ninth train of the existing MLNG terminal. Petronas began producing natural gas from the first field (NC3) at the end of 2016 and expects to bring the other two fields (NC8 and Kasawari) online by 2020.58 However, Petronas is considering selling up to 49% of the Kasawari gas project, which contains an estimated 3.2 Tcf in deepwater natural gas resources. The Kasawari field has elevated levels of carbon dioxide, so development requires advanced technologies. Petronas is seeking a skilled partner who can efficiently develop the Kasawari field in a more competitive gas price environment.59 Output from the Kanowit field began at the end of 2016 and is the initial feedstock for Malaysia’s first floating liquefaction terminal. The Kanowit field is part of the larger Kumang Cluster, which began producing natural gas in 2011.60

Newfield Exploration, which recently divested its Asian upstream assets, made a significant gas discovery in the SK-310 PSC offshore Sarawak in 2013. The company claimed the find could boost gas resources by 1.5 Tcf.61 In 2014, SapuraKencana Petroleum, a Malaysia oil services company, purchased Newfield’s Malaysian upstream assets and now holds 30% of the SK-310 Block, while Petronas and Mitsubishi have 40% and 30% shares, respectively. SapuraKencana reported that it plans to bring the PSC’s first field, B15, onstream towards the end of 2017 and the B14 field around 2020.62 In addition, SapuraKencana announced a significant gas reserve discovery in the PSC for block SK408 in 2016, signaling more near-term natural gas development potential in Sarawak.63

The state of Sabah also holds reserves that are already under production or are scheduled to come online by 2020. A consortium consisting of Petronas (40%), ConocoPhillips (30%), and Shell, the operator, (30%), are developing three contiguous natural gas and condensate fields, including Kebabangan, Kamunsu East, and Kamunsu East Upthrown Canyon (KBB Cluster) in the northwestern Sabah state. The KBB cluster is estimated to hold 4.7 Tcf of gas.64 KBB production began in late 2014, and the KBB floating platform has a design capacity of 300 Bcf/y for natural gas, 80,000 b/d for crude oil, and 22,000 b/d for condensate.65 The platform acts as a hub for the development of these deepwater gas fields and ties in the Malikai crude oil field that came online at the end of 2016.66

Other upstream developments offshore Sabah include the Kinabalu Non-Associated Gas project and the Rotan field in Block H. The Kinabalu project contains two natural gas fields and is scheduled to come online in mid-2017.67 Rotan and adjacent fields, operated by Murphy Oil in partnership with Pertamina of Indonesia and Petronas, have an estimated 1 Tcf of reserves. These fields are located far offshore from existing infrastructure on the coast of Sabah and are slated to supply Malaysia’s second floating liquefaction terminal by 2020.68

Pipelines

Malaysia has one of the most extensive natural gas pipeline networks in Asia, totaling about 1,530 miles. The Peninsular Gas Utilization (PGU) project, completed in 1998, expanded the natural gas transmission infrastructure on Peninsular Malaysia. The PGU system spans 1,550 miles and has the capacity to transport 730 Bcf/y of natural gas.69 Other gas pipelines run from offshore gas fields to gas processing facilities at Kertih. A number of pipelines link Sarawak’s offshore gas fields to the Bintulu LNG facility. However, limited gas distribution coverage exists in much of the Sarawak and Sabah states.

The Sabah-Sarawak Integrated Oil and Gas Project, installed in 2014, includes the 318-mile onshore Sabah-Sarawak Gas Pipeline (SSGP) and can transport about 365 Bcf/y of gas from Sabah’s offshore fields to the Petronas LNG complex in Bintulu for liquefaction and export. Some natural gas from the terminal is also reserved for fueling downstream industrial projects and for power generation in Sabah.70 Other pipelines link natural gas fields located offshore Sabah to the Labuan Gas Terminal.

The Association of South East Asian Nations (ASEAN) is promoting the development of a Trans-ASEAN Gas Pipeline system (TAGP) aimed at linking ASEAN’s major gas production and consumption centers by 2020 through a network of gas pipelines. Because of Malaysia’s extensive natural gas infrastructure and its location, the country is a natural candidate to serve as a hub in the ongoing TAGP project, which currently has 2,250 miles in place of the proposed 2,800 miles of pipelines.71 Malaysia began exporting natural gas to Singapore through a pipeline in 2000. Singapore currently has two contracts to import 84 Bcf/y of gas from Malaysia, but its imports dropped to 44 Bcf in 2015 because Singapore imports natural gas through its new LNG terminal. Natural gas pipelines between West Natuna, Indonesia and Duyong, Malaysia were installed in 2002, and Malaysia began importing natural gas from Indonesia in 2009. In 2015, Malaysia imported around 90 Bcf of natural gas from Indonesia.72 The Trans-Thailand-Malaysia Gas Pipeline was commissioned in 2005 and allows Malaysia to transport natural gas from the Malaysia-Thailand JDA to its domestic pipeline system.

LNG trade

Malaysia remains a key global LNG exporter as the third-largest exporter after Qatar and Australia in 2016 (Figure 7). Malaysia is developing sizeable reserves in its eastern region and has expanded its export capacity in 2017. However, growing natural gas supply shortages in demand centers in Peninsular Malaysia have prompted Petronas to construct the country’s first LNG import terminal in this western region to augment natural gas supply from pipelines.

The Malaysia LNG (MLNG) complex located at Bintulu in the state of Sarawak is the main hub for Malaysia’s natural gas industry and is operated by Petronas. Petronas owns majority interests in the facility’s three LNG processing plants (Dua, Tiga, and Satu), which are supplied by the country’s offshore natural gas fields. MLNG is one of the largest LNG complexes in the world, with nine production trains and a total liquefaction capacity of 1.4 Tcf/y. Petronas began operating the facility’s ninth train in January 2017. Japanese financing has been critical to the development of Malaysia’s LNG facilities. The complex at Bintulu also hosts Shell’s gas-to-liquid (GTL) project, which currently has a capacity of 15,000 b/d of petroleum liquids. Petronas commissioned the ninth train of Bintulu LNG at the beginning of 2017.

Petronas proposed two floating liquefaction terminals offshore Sarawak and Sabah to capture greater economic value from the country’s smaller, more remote gas fields. These plants would have the flexibility to serve the export or domestic markets and are transportable to other locations. Both terminals will add another 131 Bcf/y of liquefaction capacity. The Petronas floating LNG (FLNG) Satu project, located off Sarawak near the Petronas LNG complex, has a capacity of 58 Bcf/y and is contracted to use natural gas from the Kanowit field for at least five years. Petronas FLNG Satu, which is the world’s first floating liquefaction terminal, commenced commercial operations in early 2017. Petronas plans to market some of the natural gas from the facility to the domestic market, but it has not signed any purchase contracts so far.

PFLNG-2, the country’s second proposed offshore LNG terminal, intends to monetize natural gas production from the Rotan field and other fields in Block H, northeast of Sabah in the South China Sea. The terminal has a design capacity of 73 Bcf/y, but it is uncertain whether the facility will serve domestic demand in Peninsular Malaysia or serve as exports to other Asian markets. Petronas made a final investment decision on the project in early 2014. However, the low price environment and Petronas’ subsequent announcement to reduce capital expenditures in the near term has caused the NOC to delay commencement of Petronas FLNG-2 by two years to 2020. (Table 2).

LNG exportsIn 2016, Malaysia shipped about 1.2 Tcf/y of LNG and accounted for 10% of LNG exports worldwide.73 Key importers of Malaysia’s LNG are Japan (62%), South Korea (16%), China (11%), and Taiwan (10%) (Figure 8). Most of Malaysia’s LNG is sold through medium- or long-term supply contracts with traders or utilities in these countries. Malaysia also has sold LNG cargoes to Petronas LNG Limited, a trading company based in Malaysia, which ships spot LNG cargoes to many locations around the world.

The Malaysia LNG (MLNG) complex located at Bintulu in the state of Sarawak is the main hub for Malaysia’s natural gas industry and is operated by Petronas. Petronas owns majority interests in the facility’s three LNG processing plants (Dua, Tiga, and Satu), which are supplied by the country’s offshore natural gas fields. MLNG is one of the largest LNG complexes in the world, with nine production trains and a total liquefaction capacity of 1.4 Tcf/y.74 Petronas began operating the facility’s ninth train in January 2017. Japanese financing has been critical to the development of Malaysia’s LNG facilities. The complex at Bintulu also hosts Shell’s gas-to-liquid (GTL) project, which currently has a capacity of 15,000 b/d of petroleum liquids. Petronas commissioned the ninth train of Bintulu LNG at the beginning of 2017.75

Petronas proposed two floating liquefaction terminals offshore Sarawak and Sabah to capture greater economic value from the country’s smaller, more remote gas fields. These plants would have the flexibility to serve the export or domestic markets and are transportable to other locations. Both terminals will add another 131 Bcf/y of liquefaction capacity. The Petronas floating LNG (FLNG) Satu project, located off Sarawak near the Petronas LNG complex, has a capacity of 58 Bcf/y and is contracted to use natural gas from the Kanowit field for at least five years. Petronas FLNG Satu, which is the world’s first floating liquefaction terminal, commenced commercial operations in early 2017.76 Petronas plans to market some of the natural gas from the facility to the domestic market, but it has not signed any purchase contracts so far.77

PFLNG-2, the country’s second proposed offshore LNG terminal, intends to monetize natural gas production from the Rotan field and other fields in Block H, northeast of Sabah in the South China Sea. The terminal has a design capacity of 73 Bcf/y, but it is uncertain whether the facility will serve domestic demand in Peninsular Malaysia or serve as exports to other Asian markets. Petronas made a final investment decision on the project in early 2014. However, the low price environment and Petronas’ subsequent announcement to reduce capital expenditures in the near term has caused the NOC to delay commencement of Petronas FLNG-2 by two years to 2020.78 (Table 2).79

Table 2. Malaysia’s existing and planned liquefaction terminals
Project name Owners Peak output (Bcf/y) Target start year
Existing LNG terminals
Petronas LNG (Satu) Petronas 90%; Mitsubishi 5%; Sarawak state government 5% 406; 3 trains1 Operational
Petronas LNG (Dua) Petronas 80%; Mitsubishi 10%; Sarawak state government 10% 465; 3 trains Operational
Petronas LNG (Tiga) Petronas 60%; JX Nippon 10%; Shell 15%; Mitsubishi 5%; Sarawak state government 10% 372; 2 trains Operational
Petronas LNG Train 9 Petronas 90%; JX Nippon 10% 174 Operational
Petronas Floating LNG Satu2 Petronas 58; 1 train Operational
Projects under construction
Petronas Floating LNG 2 Petronas 73; 1 train 2020
1A train is an independent unit for liquefaction and purification.
2A floating terminal is a unit above an offshore gas field that produces, liquefies, stores, and transfers natural gas.
Sources: IHS Energy, International Gas Union, International Energy Agency, company websites
LNG importsAlthough Malaysia is one of the world’s largest LNG exporters, the country currently experiences a geographic disparity between natural gas supply and demand. The Western Peninsular Malaysia demands more natural gas to fuel the power and industrial sectors, while the eastern states of Sarawak and Sabah, located on Borneo Island, produce natural gas. To meet gas needs in Peninsular Malaysia, Petronas is developing regasification terminals to secure supply from the global gas market.
Malaysia’s first regasification terminal, Lekas LNG, began operating in 2013. Lekas LNG is located near Malacca and has a capacity of 184 Bcf/y. Malaysia imports about 70 Bcf of LNG annually, and ships only small amounts from its own production at the MLNG liquefaction terminal.80 Petronas and Dialogue Group agreed to develop a terminal in Johor, Pengerang LNG. The regasification terminal, which is linked to the NOC’s RAPID project, is slated to provide natural gas feedstock to the refining and petrochemical complex and to a proposed power plant at the site. Pengerang LNG is under construction and scheduled to come online by 2018. Several other regasification projects have been proposed in the past few years, but some were cancelled (Table 3).81 Gradual natural gas price prices and competition with coal and oil for power supply have slowed natural gas demand and the progress of other proposed terminals in the past few years.

Petronas signed agreements with Brunei and Australia’s Gladstone liquefaction project to supply some of its domestic gas demand over the next decade. The NOC has also purchased some natural gas from the spot market. Petronas plans to source some LNG from its new liquefaction projects coming online in the eastern part of the country, although it has not signed any purchase contracts for the supply.82

Table 3. Malaysia’s existing and planned regasification terminals
Project name Owners Peak output (Bcf/y) Target start year
Existing LNG terminals
Lekas LNG/ Malacca Petronas 184 2013
Planned projects
Pengerang LNG Petronas 65%; Dialogue Group 25%; Johor government 10% 244 2018
Sources: IHS Energy, International Gas Union, International Energy Agency, company websites, The Star83, LNG World News84

Electricity

Malaysia’s electricity demand, met mostly by natural gas and, to a lesser extent, coal, continues to expand rapidly. This growth coupled with insufficient natural gas supply in high-demand centers is driving the country to diversify its power generation fuel mix and to add electricity capacity to avoid future power shortages.

Malaysia’s economic development and population growth have resulted in substantially higher electricity demand over the past decade. The country’s net electricity generation was about 140 billion kilowatthours in 2015 (Figure 9).85 The Malaysian states anticipate that electricity demand will grow by an average of 3% and more than 5% each year in Peninsular Malaysia and eastern Malaysia, respectively, through 2020.86 The high-demand centers, particularly in Peninsular Malaysia, are facing shortages of natural gas and a need for greater generation capacity. Sarawak and Sabah in Borneo require more energy to meet the demands of their growing infrastructure and industrial sectors. Malaysia is seeking to diversify its portfolio of power generation fuels and to reduce the use of more expensive fuels.

According to the Energy Commission of Malaysia, the industrial sector was the primary source of power demand and accounted for about 46% of the total in 2014.87 Commercial and residential demand were 32% and 21%, respectively. Transportation and agriculture made up less than 1% of power demand.

Sector organization

Each of Malaysia’s three states has a state utility that holds a monopoly in the transmission and distribution sectors. These companies are the largest stakeholders in power generation, although there is a sizeable private ownership through independent power producers (IPPs) that generate most of the country’s electricity. Tenaga Nasional Berhad (TNB), located in Peninsular Malaysia, made up a 23%-market share of electric generation in the peninsula in 2014, while IPPs held the remaining shares.88 Sarawak Energy Berhad (SEB) generated 43% of the electricity in Sarawak. Syarikat SESCO Berhad (a subsidiary of SEB) is responsible for the generation, transmission, and distribution of power in Sarawak and sells all of Sarawak’s power generation through a government joint venture. Sabah Electricity Sdn Berhad (SESB) is 80% owned by TNB and 20% owned by the Sabah government. SESB generated about 21% of the electricity in Sabah with the remainder generated by IPPs and industrial facilities.89

The country’s three electric transmission grids are located in Peninsular Malaysia, Sarawak, and Sabah. The grid in Peninsular Malaysia, the largest of the three, connects with electricity systems in Thailand and Singapore. TNB plans to reduce transmission losses and increase electric supply reliability in Peninsular Malaysia over the next two decades. Sarawak Energy and Indonesia constructed a transmission line from Sarawak to West Kalimantan, Indonesia (both located on Borneo Island). The transmission line, which was completed in January 2016, began to export some of Sarawak’s new, inexpensive hydropower generation to Indonesia and to enhance the electricity grid in this region.90

One of Malaysia’s recent energy policies is to reduce government energy subsidies by raising overall electricity and natural gas tariffs and passing fuel costs through to electricity end-users. Malaysia raised electricity tariffs on average by 7.1% in June 2011 to help reduce the subsidy the government provides on behalf of electricity companies. The government raised the price of natural gas to electric power consumers in June 2011. The government also planned to pass through fluctuations in fuel prices and raise natural gas prices that electric power generators pay every six months starting in late 2011. However, natural gas prices remained at these rates for more than two years until January 2014, when the government reduced the natural gas subsidy for power generation and, in essence, raised the natural gas price for power production. The subsidy for coal-fired power was also reduced, and prices for power in Peninsular Malaysia and Sabah increased.91 At the beginning of 2016, the Malaysian government kept power tariffs unchanged, but consumers in the peninsula, who used more than 300 kilowatthours (kWh) per month, saw their electricity rebates cut by the Malaysian government. Consumers in Malaysia’s portion of Borneo Island were unaffected because they do not use the Imbalance Cost Pass-Through mechanism, which helps provide stability when fuel costs become volatile.92 In June 2016, the government kept power tariffs unchanged in Peninsular Malaysia but decreased the average electricity tariff in Borneo for the remainder of 2016.93

Electricity generation and capacity

Total installed generation capacity at the end of 2014 was more than 30 gigawatts (GW), located mostly in Peninsular Malaysia.94 The government’s efforts are centered on meeting the country’s rising electricity demand through a more balanced portfolio of electric generation using coal, renewable sources, and to a lesser extent, natural gas. Malaysia’s policy to reduce power consumption also entails reforming electricity prices to be more reflective of market values and promoting energy-efficiency measures.

Fossil fuels, primarily coal and natural gas, made up about 81% of Malaysia’s installed electric generation capacity at the end of 2014 and 88% of the country’s electricity output in 2015 (Figures 10 and 11).95 Many of these natural gas-fired power plants are located in Peninsular Malaysia, and some have dual-fuel capabilities, allowing for greater flexibility in fuel type. Tightness of natural gas supply in Peninsular Malaysia caused by the state’s production declines have resulted in increased use of coal-fired generation. Peninsular Malaysia intends to import LNG through new regasification terminals and to diversify its power generation portfolio with other fuels, such as coal and hydroelectricity, to alleviate power constraints.96

Malaysia still relies on natural gas to fuel a large portion of its power plant generation, and all three states are constructing combined-cycle units to replace less efficient natural gas power plants or diesel units and supply a growing electricity market. TNB constructed a 1,100 MW combined-cycle gas turbine plant in Penang, Peninsular Malaysia, which began operations in February 2016.97 Peninsular Malaysia is developing an additional 4,400 MW of natural gas-fired capacity by 2021. Sabah state relies on natural gas for most of its power generation and added 400 MW of gas-fired capacity in 2014, including the Kimanis gas-fired power plant, to replace some of the existing diesel plants. Sabah plans to continue retiring oil-fired facilities and to add another 400 MW of capacity from combined-cycle gas turbines by 2021.98 Sarawak is planning to build the 400 MW Tanjung Kidurong gas power plant in Bintulu with completion expected by mid-2019. After the Tanjung Kidurong project, Sarawak plans to develop another 1,200 MW natural gas-fired powered plant at Samalaju Industrial Park in Bintulu by around 2025.99

Although petroleum products currently account for a very small portion of the capacity and generation and have been replaced by natural gas and coal inputs, they have played a critical role as an alternative fuel in the past few years to alleviate power shortages when other fuels were in short supply. Diesel and fuel oil accounted for 1% of Malaysia’s electricity generation in 2015 and were used mostly in generators in remote areas of Sabah state.100 Most of these oil-fired plants are old, and Sabah is gradually replacing diesel generators and other oil-fired capacity with plants that use natural gas or renewable energy as a feedstock.

Coal, which accounted for 25% of Malaysia’s total installed capacity and 41% of electricity generation in 2015, has become much more economically competitive with natural gas for power generation feedstock. Fuel switching from natural gas to coal has gained traction in Peninsula Malaysia over the past few years, spurring utilities and power companies to develop more coal-fired capacity in the country by 2020. Malaysia’s first ultra-supercritical coal-fired power plants (Manjung 4 and Tanjung Bin in Peninsular Malaysia) began operations in 2015 and 2016, respectively, and added 2,000 MW of coal-fired capacity.101 Another coal-fired generation facility, Manjung 5, will further add 1,000 MW by the end of 2017. A joint venture consisting of Mitsui of Japan and a subsidiary of Malaysia’s Ministry of Finance is constructing a 2,000 MW coal-fired plant, Jimah East Power, to begin generating electricity in 2019.102

Malaysia produced about 3 million short tons of coal in 2015, or about 10% of its coal consumption. The country is limited in domestic coal reserves, the majority of which are located in Sarawak.103 Sarawak uses all of the coal production for its coal-fired facilities, and Sarawak Energy is constructing the 600-MW Balingian project, which is scheduled to commence operations in 2018.104 Malaysia’s coal imports, mainly from Indonesia and Australia, rose to 27 million short tons in 2016 from 22 million short tons the year before and have been used to fuel the country’s expanding coal-fired generation.105

Hydroelectricity, which accounted for 15% of Malaysia’s total electric capacity and 11% of electricity generation in 2015, is undergoing significant expansion.106 Most of the hydroelectric facilities are small or medium sized and are located in Peninsular Malaysia. However, the Sarawak state has the most potential for hydroelectric growth considering its rainfall and geography.

As part of the government’s Sarawak Corridor of Renewable Energy (SCORE) program, which is designed to use Sarawak’s vast energy resources to serve the power needs of several proposed energy-intensive manufacturing projects, the state intends to increase generation capacity from domestic hydroelectricity and other renewable sources through 2030.107 In 2014, hydroelectricity represented about 60% of Sarawak’s power generation and is anticipated to expand to 80% by 2020, replacing some of the state’s dependence on natural gas-fired power generation.108 According to the Sarawak government, total potential hydroelectric capacity in the state is 20 GW, about four times the current capacity.109 Sarawak Hidro, a subsidiary of the Ministry of Finance, developed the massive 2,400-MW Bakun Hydroelectric plant, which was fully commissioned by 2012. The 944 MW Murum Dam became operational in September 2016.110 Sarawak Energy plans to construct the 1,285 MW Baleh Dam by 2025 and has proposed other projects.111

Malaysia encourages investment in other types of renewable energy projects as part of its efforts to reduce carbon dioxide emissions 40% from the 2005 level by 2020, to cut greenhouse gas emissions intensity of gross domestic product by 45% by 2030, and to diversify its electricity fuel mix.112 As part of this endeavor, Malaysia enacted feed-in tariffs for solar, biomass (primarily from the country’s sizeable palm oil production), biogas, and mini-hydroelectric projects. TNB has estimated about 800 MW of large-scale solar power coming online in Peninsular Malaysia and 200 MW in Sabah by 2020.113

Notes

  • Data presented in the text are the most recent available as of April 26, 2017.
  • Data are EIA estimates unless otherwise noted.

Endnotes

1Prime Minister Department of Malaysia, Performance Management and Delivery Unit, Economic Transformation Program, Oil Gas and Energy (accessed March 2017); Economic Transformation Program, A Roadmap for Malaysia, Chapter 6, Oil gas and energy, page 168; Malaysia Development Investment Authority, Oil and Gas (accessed March 2017).
2ibid
3bid, International Monetary Fund, “IMF Staff Completes 2017 Article IV Mission to Malaysia“, December 14, 2016; IMF “Press Release: IMF Executive Board Concludes 2016 Article IV Consultation with Malaysia“, May 4, 2016.
4International Energy Agency, Statistics, Malaysia: Balances for 2014 (accessed March 2017).
5Oil & Gas Journal, “Worldwide look at reserves and production” December 5, 2015
6Energy Commission of Malaysia, Malaysia Energy Information Hub, Statistics (accessed March 2017).
7Petronas, “Petronas Group Financial Results Announcement Q4 and Year end FY 2016“, page 9; Bank Negara Malaysia, “Economic and Financial Data for Malaysia” (accessed March 2017).
8Petronas, “Sustainability Report 2015“, pages 18-19.
9IHS Energy, LNG Market Profile: Malaysia, November 2016, page 15.
10Nikkei Asian Review, “Pertamina buys Malaysian assets to meet domestic demand“, April 9, 2015; The Jakarta Post, “Pertamina acquires Murphy’s Malaysian assets for $2 billion“, October 2, 2014.
11Bloomberg, “Malaysia Raises Fuel Prices as Najib Seeks to Trim Budget Gap” September 2, 2013
12Bloomberg. “Malaysia Scraps Fuel Subsidies as Najib ends Decades-Old Policy” November 21, 2014
13EIA, “STEO” December 20, 2016
14FACTS Global Energy Asia-Pacific Databook 1: Supply, Demand, and Prices, Spring 2015, page 120; S&P Global Platts, “Malaysian Tapis oil field EOR project set to start up end 2013: ExxonMobil“, July 10, 2013
15FACTS Global Energy, Asia Pacific Databook 1: Supply, Demand, and Prices, Spring 2016, pages 105-106.
16Hart Energy, “Malaysia Plans $61 Billion E&P Push” January 17, 2013; Newsbase, AsianOil, “Oil prices continue to hold Malaysian projects back”, March 15, 2017, page 8 and “Petronas seeks outside investment”, March 8, 2017, page 7.
17IHS Energy, “Malaysia Licensing Activity Review 2015”, November 28, 2016.
18Economic Transformation Program, “Rejuvenating Existing Fields through Enhanced Oil Recovery (EOR)” (Accessed March 2017); FACTS Global Energy Asia-Pacific Databook 1: Supply, Demand, and Prices, Spring 2016, page 106; and Oil & Gas Journal, “ExxonMobil to boost Tapis field production in Malaysia” June 10, 2010.
19Shell, “Petronas and Shell Sign Production Sharing Contracts for Enhanced Oil Recovery“, January 16, 2012.
20The Star, “Shell, Petronas expand Baram Delta terms to include gas rights” July 3, 2014.
21Newsbase, AsianOil, “Hibiscus to buy into Malaysian EOR project”, October 19, 2016, page 10.
22Newsbase, AsianOil, “Oil prices continue to hold Malaysian projects back”, March 15, 2017, page 9.
23The Star Online, “Petronas achieves first oil production from Tanjong Baram field” January 6, 2016.
24Rigzone, “First Oil Flows from Kapal, Banang, Merantai Cluster off Peninsula Malaysia” January 13, 2014.
25The Star Online, “End of the road for risk-services contracts (RSCs)” July 12, 2016.
26Newsbase, AsianOil, “Octanex NL on tract to commence oil production in Malaysia”, January 18, 2017, page 16.
27Murphy Oil Corporation website, Malaysia (accessed March 2017); Oil and Gas Journal, “Oil production starts from Kikeh field off Malaysia” August 22, 2007; IHS Energy, “Malaysia crude oil production”, January 4, 2017; Newsbase, AsianOil, “Murphy wraps up Malaysian field shutdown”, November 9, 2016, page 11.
28FACTS Global Energy, Asia Pacific Databook 1: Supply, Demand, and Prices, Spring 2016, page 106; “Shell Starts Oil Production from Gumusut-Kakap Deepwater Platform in Malaysia“, October 8, 2014 and Our Major Projects: Gumusut-Kakap (accessed March 2017)
29The Star, “MISC buys back 50% equity in Gumusut-Kakap for RM 1.9bil“, February 24, 2016.
30Rigzone, “Shell Sees Malikai Project in Malaysia as Boosting Deepwater Ambitions” June 14, 2016; Newsbase AsianOil, “Shell starts up Malikai deepwater project”, December 21, 2016, page 10; Shell Global, “Shell starts oil production from Malikai deep-water platform in Malaysia“, December 14, 2016 and Our Major Projects: Malikai (accessed March 2017).
31Platts, “Malaysia, Brunei sign series of oil, gas agreements” December 9, 2013; IHS Energy, Liquefaction Project Profile: Brunei LNG, October 28, 2016, page 23.
32UN-Nippon Foundation, “Maritime delimitation between Vietnam and her neighboring countries” April 2009.
33Offshore Technology, Projects, PM-3 Commercial Arrangement Area (accessed March 2017); Repsol, Annual Report, Repsol in 2015, Malaysia (accessed March 2017); VnExpress, “PetroVietnam, Petronas extend joint upstream oil and gas project to 2027“, May 10, 2016.
34Rigzone, “Petronas, PetroVietnam Extend PM3CAA PSC in Malaysia-Vietnam Waters to 2027“, May 10, 2016.
35Rigzone, “Shell & Petronas Carigali Awarded Two Ultra-Deepwater Blocks“, February 16, 2005; World Politics Review, “Naval Standoff Between Indonesia, Malaysia“, June 12, 2009.
36United Nations and World Trade Organization, International Trade Center, “Trade Map” (Accessed March 2017)
37United Nations and World Trade Organization, International Trade Center, “Trade Map” (Accessed March 2017)
38FACTS Global Energy, Asia Pacific Databook 1: Supply, Demand, and Prices (pages 47-51) and Databook 3: Oil Product Balances (pages 34-36), Fall 2016.
39FACTS Global Energy, Asia Pacific Databook 2: Refinery Configuration & Construction, Spring 2017, page 34.
40Petronas, “Saudi Aramco, Petronas Sign Share Purchase Agreement for Equity Participation in Malaysia’s RAPID Downstream Project“, February 28, 2017; Reuters, “Saudi Aramco to buy $7 billion stake in Petronas’ RAPID refinery project“, February 28, 2017.
41International Energy Agency, Oil Market Report 2017, page 126.
42VTTI, Terminals, ATB, Johor, Malaysia (Accessed March 2017); S&P Global Platts, “VTTI to complete Phase 2 of Malaysia’s ATT Tanjung Bin oil terminal in Q1 2015“, August 15, 2013.
43Vopak, “Pengerang Independent Terminals” (Accessed March 2017); Dialog, “Pengerang Deepwater Terminal” (Accessed March 2017); International Energy Agency, Oil Market Report 2017, page 126; Reuters, “Update 1-Vopak to start crude oil storage site in Malaysia in March“, February 3, 2015.
44ibid
45Reuters, “Malaysia to boost oil storage business as new terminal starts on Saturday” April 11, 2014 and Newsbase AsianOil April 16, 2014.
46International Energy Agency, Oil Market Report 2017, page 126; Maritime Herald, “Malaysia started building of Kuala Linggi International Port in Malacca worth 2.8 billion USD”, November 24, 2016.
47International Energy Agency, Oil Market Report 2017, page 126; Reuters, “Malaysia delays Sabah oil terminal start 3mths-sources” February 11, 2014.
48Oil &Gas Journal, “Worldwide Look At Reserves and Production” December 5, 2016, page 22.
49Energy Commission of Malaysia, Malaysia Energy Information Hub, Statistics, Natural Gas – Reserve (accessed March 2017).
50IHS Energy, “LNG Export Sustainability Series: Malaysia”, July 16, 2014; Shell, Annual Report 2016, page 38.
51IHS Energy, LNG Market Profile: Malaysia, November 2016, pages 15-16, LNG Data Sheet: Malaysia, March 1, 2017; Business News, “Gas tariff hike in the offing“, March 28, 2016; New Straits Times, “No change in the power tariffs“, June 30, 2016; Malaysian Gas Association, Malaysia: Natural Gas Industry Annual Review 2016 Edition, pages 42-43.
52The Star, “Natural gas tariffs to fall for Jan-June 2017“, December 28, 2016.
53Malaysia Energy Information Hub, National Energy Balance 2014, page 42. Aggregated Power stations and Cogeneration, and Industry and Non-energy.
54FACTS Global Energy, East of Suez Gas Databook: Asia Pacific in the Global Market, September 2016, pages 167-168; IHS Energy, “LNG Import Outlook: Malaysia”, July 14, 2016, page 5.
55IHS Energy, “MTJDA gas production”, January 4, 2017.
56Malaysia-Thailand Joint Authority (MTJA), Petroleum Potential and Exploration, Development (accessed March 2017).
57Borneo Post, “Shell Malaysia signs new exploration contract with Petronas“, November 28, 2012.
58IHS Energy, Liquefaction Project Profile: MLNG T9, October, 2016, pages 4 and 16.
59The Star, “Kasawari project outlook seen improving“, February 23, 2017; Newsbase, AsianOil, “Petronas seeks outside investment”, March 8, 2017.
60Offshore Technology, “Kumang Cluster Development Phase 1, Sarawak, Malaysia” (accessed April 2017).
61Platts, “Explorer Newfield says makes ‘significant’ gas find offshore Sarawak” April 3, 2013.
62SapuraKencana, “Energy Development Assets” (Accessed April 2017).
63SapuraKencana Energy, “SapuraKencana Energy makes significant gas discovery offshore Malaysia“, May 31, 2016.
64IHS Energy, Liquefaction Project Profile: PFLNG 2, November 2016, page 17.
65IHS Energy, Liquefaction Project Profile: MLNG Dua, October 2016, page 11; Offshore Energy Today, Gas Flows from Kebabangan (Malaysia), November 12, 2014; Conoco Phillips, “2016 Annual Report“, page 17.
66Offshore Technology, “Kebabangan Gas Field, Malaysia” (accessed March 2017).
67The Edge Markets, “Uzma takes up Kinabalu gas development project where THHE Fabricators left off“, January 18, 2017.
68Offshore Technology, “PFLNG – 2 / Rotan FLNG Project, Sabah, Malaysia“, (accessed March 2017); IHS Energy, Liquefaction Project Profile, PFLNG 2, November 2016, page 4.
69Petronas, “Peninsular Gas Utilization Project
70IHS Energy, LNG Export Sustainability Series: Malaysia, July 16, 2014, page 4; Daily Express, “Exciting year for oil & gas industry” January 5, 2015.
71ASEAN Council on Petroleum, Project, Trans ASEAN Gas Pipeline Project, (accessed April 2017); ASEAN, Trans-ASEAN Gas Pipeline, Securing Long Term Energy Supply for the Region, October 2015; Master Plan on ASEAN Connectivity, April 2014, pages 17-18; International Energy Agency, Medium-Term Natural Gas Market Report, 2014: pg. 184.
72IHS Energy, LNG Data Sheet: Malaysia, March 1, 2017.
73IHS Energy, Global LNG Trade Data, January 10, 2017.
74IHS Energy, LNG Market Profile Malaysia, November 2016; IHS Energy Regasification Terminals Database, February 10, 2017; JGC, “JCG wins EPCC contract for LNG complex expansion project in Malaysia” January 26, 2015
75ibid and The Star Online, “Petronas sells 10pc in Bintulu LNG plant to JX Nippon Oil” June 3, 2016.
76Reuters, “Petronas to export world’s first LNG from floating production unit: data, sources“, March 30, 2017; Offshore Energy Today, “Petronas’ first FLNG unit produces LNG“, December 9, 2016; IHS Energy, Liquefaction Database, February 16, 2017.
77IHS Energy, Liquefaction Project Profile: PFLNG Satu, December 2016, page 5.
78LNG World News, “Malaysia’s Petronas delays its second FLNG project” February 29, 2016; IHS Energy, Liquefaction Project Profile: PFLNG 2, November 2016, pages 4 and 30.
79Capacity data and dates from IEA’s Medium-Term Gas Market Report 2016, IHS Energy regasification database (February 2017), IHS liquefaction database (February 2017), and International Gas Union, World Gas LNG Report 2016.
80IHS Energy, Historical LNG Trade Data, March 14, 2017.
81IHS Energy, “LNG Import Outlook: Malaysia”, July 14, 2016; LNG World News, “Petronas, Sabah Energy scrap Malaysian LNG project” February 10, 2016; The Star, “Ranhill tipped for another IPP, a 300 MW power plant in Sabah” September 5, 2016.
82IHS Energy, LNG Market Profile: Malaysia, November 2016, page 10.
83The Star, “Dialog units sign accord on Pengerang LNG project” November 15, 2014 and “Dialog Group seeks nod to raise RM2.65b for Pengerang expansion” March 19, 2015.
84LNG World News, “Samsung C&T awarded LNG terminal contract in Johor” November 24, 2014.
85EIA, International Energy Statistics (accessed April 2017); Malaysia’s Energy Commission, Malaysia Energy Statistics Handbook 2016, page 33.
86Malaysia’s Energy Commission, Peninsular Malaysia Electricity Supply Industry Outlook 2016, page 30; Malaysia’s Energy Commission, Sabah Electricity Supply Industry Outlook 2015, pages 26, 30; Sarawak Energy, Annual Report 2015, page 30.
87Malaysia’s Energy Commission, National Energy Balance 2014, page 58, 59.
88Malaysia’s Energy Commission, 2014 Performance and Statistical Information on Electricity Supply Industry in Malaysia, page 107.
89ibid
90The Star, “Sarawak exporting electricity to West Kalimantan” May 11, 2016; Borneo Post, “Electricity to be exported to Kalimantan by year-end“, March 19, 2015.
91IHS Energy, LNG Market Profile, Malaysia, November 2016, page 16; and IHS Energy, “Malaysian electricity prices to rise 15% in 2014 on back of fuel subsidy cut”, December 4, 2013.
92Tenaga Nasional, Tariff and ICPT (accessed April 2017); Malaymailonline, “Energy Minister: No change to 2016 power tariffs, but peninsula users to get smaller rebate” December 8, 2015.
93New Straits Times, “No change in power tariff rates” June 30, 2016.
94EIA International Energy Statistics; Malaysia’s Energy Commission, 2014 Performance and Statistical Information on Electricity Supply Industry in Malaysia, page 107.
95EIA International Energy Statistics; Malaysia’s Energy Commission, Malaysia Energy Statistics Handbook 2016, page 33; Malaysia’s Energy Commission, 2014 Performance and Statistical Information on Electricity Supply Industry in Malaysia, page 107.
96FACTS Global Energy, East of Suez Gas Databook: Asia Pacific in the Global Market, September 2016.
97The Sun Daily, “Commercial operation date of TNB’s Prai power plant delayed: MARC” January 19, 2016.
98Petronas, “Yayasan Sabah’s joint venture power plant begins full operations” November 9, 2014; Malaysia’s Energy Commission, Sabah Electricity Supply Industry Outlook 2015, pages 14, 31.
99The Borneo Post, “Sarawak Energy partners with GE, Sinohydro on CCGT devt in Tg Kidurong” October 29, 2016.
100Malaysia’s Energy Commission, Malaysia Energy Statistics Handbook 2016, page 33.
101The Sun Daily, “Malakoff’s Tanjung Bin energy Power Plant achieves COD” March 22, 2016; The Star, “RM6bil Manjung 4 power plant to be switched on this sunday” April 10, 2015.
102TNB, “Construction of Jimah East Power Commences” July 25, 2016; TNB Annual Report 2016, page 38.
103IHS Energy, Malaysia Coal Profile, January 2017, pages 4 and 7; Malaysia’s Energy Commission, Malaysia Energy Information Hub, Coal Statistics.
104Sarawak Energy, Generating Energy for Sarawak, (accessed April 2017).
105United Nations Comtrade, International Trade Center, (accessed April 2017).
106U.S. EIA International Energy Statistics; Malaysia’s Energy Commission, Malaysia Energy Statistics Handbook 2016, page 33; Malaysia’s Energy Commission, 2014 Performance and Statistical Information on Electricity Supply Industry in Malaysia, page 107.
107Regional Economic Development Authority (RECODA), Sarawak Corridor of Renewable Energy, “Why SCORE“.
108Ibid; Borneo Post, “80 percent hydro power by 2020” October 17, 2012.
109Borneo Post, “The future of hydropower in Sarawak” June 9, 2013.
110The Borneo Post, “Another accomplishment for Sarawak” September 28, 2016.
111The Star, “Sarawak Energy gets go-ahead to build Baleh dam“, September 21, 2016; Borneo Post, “Sarawak’s Power Play” February 23, 2014.
112Prime Minister Department of Malaysia, Economic Planning Unit, Eleventh Malaysia Plan 2016-2020, Chapter 6, page 6-11; United Nations Framework Convention on Climate Change, “Intended Nationally Determined Contribution of the Government of Malaysia“, page 1.
113 Malaysia’s Energy Commission, Peninsular Malaysia Electricity Supply Industry Outlook 2016, page 34; Tenaga Nasional, Annual Report 2016, page 53.

India: Bihar Assessment 2017 – Analysis

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On March 14, 2017, a man identified as Kaushal Paswan (30) was shot dead by Communist Party of India-Maoist (CPI-Maoist) cadres near Mahuraushan village in the Gaya District of Bihar. Superintendent of Police (SP), City, Avakash Kumar disclosed that Paswan, a native of Pashewa village, was a member of an anti-Maoist outfit- Bhakt Sangharsh Samiti- formed in 2016 by some Dalits as a vigilante group against Maoists, after they had killed some members of the Bhuian and Paswan communities during the State Assembly polls in 2015.

On March 8, 2017, four CPI-Maoist cadres were killed in an encounter with personnel of the 205th battalion of CoBRA (Commando Battalion for Resolute Action) of the Central Reserve Police Force (CRPF) in the forest area of Baskatwa under Gurpa Police Station in Gaya District. Acting on a tip-off about a meeting of top Maoist leaders in the area, the Security Forces (SFs) launched an operation and, on seeing SFs, the rebels opened fired, leading to an encounter in which the four Maoists were killed. SFs recovered four bodies of the rebels along with their arms. The arms included two Indian Small Arms System (INSAS) assault rifles, one Self Loading Rifle (SLR) and one AK-47 assault rifle. The slain Maoists were identified as Anil aka Deepak, ‘zonal commander’ of ‘Magadh area committee’, Rajesh Ravidas, a ‘sub-zonal commander’; Nepali Yadav and Uttam.

On March 1, 2017, cadres of the Tritiya Prastuti Committee (TPC) killed a villager, identified as Jitendra Kharwar, at Goreya village in Rohtas District. TPC is a CPI-Maoist splinter group and operates out of Jharkhand, the neighboring State.

On February 21, 2017, Mantu Khaira, ‘zonal-commander’ of the CPI-Maoist was killed in an anti-Maoist operation in Dahibara forests under Anandpur in Banka District. SFs recovered two SLRs, an AK-47 and some grenades at the encounter site.

On February 20, 2017, CPI-Maoist cadres killed one Sunil Yadav at Champapur village in Lakhisarai District. Sunil was the husband of the deputy mukhiya (village head) of Champapur village.

On January 30, 2017, Sanjay Pandey, a munshi (accountant) with Raj Kumar Constructions, engaged in construction of rural roads, was beheaded for not paying extortion money to the Naxals [Left Wing Extremists (LWEs)] in Jamui District. Maoist leaflets found near the dead body declared that those executing Government plans with the help of the Police and without obtaining CPI-Maoist permission would meet a similar fate.

According to partial data collated by the South Asia Terrorism Portal (SATP), Bihar has already accounted for at least nine Maoist-linked fatalities, including four civilians and five Maoists, in the current year (data till March 19, 2017).During the corresponding period of 2016, the number of such fatalities stood at eight (one civilian, two SF personnel and five Maoists).

Indeed, the declining trend in fatalities recorded in the State since 2011 registered a sharp reversal in 2016. According to the SATP database, 32 persons, including eight civilians, 15 SF personnel and nine Maoists, were killed in the State in 2016, in comparison to nine persons, including four civilians, three SF personnel and two Maoists, killed in 2015.

The surge in civilian fatalities, which doubled in 2016 as against 2015, is worrisome indeed. Worse, SFs appear to have been pushed on the back foot in the State. The Maoists continued to improve their kill ratio against SFs, at 1:1.66 in their favour, as against 1:1.5 archived in 2015.

The surge in Maoist-related violence in 2016 was substantially the result of three major incidents (each involving three or more fatalities), in which three civilians, 10 SF personnel and seven Maoists were killed, in comparison to no major incident registered in 2015. The most significantof these was recorded on July 18, 2016, when 10 COBRA commandos were killed and another five injured, in a CPI-Maoist orchestrated Improvised Explosive Device (IED) blast and subsequent encounter in the Chakarbanda-Dumarinala forests of Aurangabad District. Three Maoists were also killed in the encounter.

The Aurangabad incident will go a long way in denting the morale of the SF personnel not just in Bihar but across all theatres of LWE conflict in India. The manner in which the Maoists planned and trapped the elite counter-insurgency personnel speaks volumes of the hold the ultras enjoy in the region , across Aurangabad, Gaya and Jamui, the epicentre of Maoist-violence in Bihar. Incidentally, according to SATP data, out of the total of 32 fatalities in the State in 2016, 29 (seven civilians, 13 SF personnel and nine Maoists) were reported from these three Districts alone.

In addition to incidents of killing, the Maoists in Bihar have also escalated other violent activities through 2016, including abduction (two reported incidents in which six persons were abducted), arson (10 incidents), bomb blasts (four occasions), attacks on railway property (three incidents), among others. During 2015, the Maoists were involved in three incidents of abduction in which three persons were abducted, and three incidents of arson. No incident of bomb blast or attack on railway property was recorded during 2015.

The Maoists also issued four bandh (shut down strike) calls on different issues in 2016, in comparison to five such calls in 2015. The Maoists had given three such calls in the State in 2014.

Union Ministry of Home Affairs (UMHA) data confirms the spike in the Maoist-linked incidents in the State in 2016, with 129 Maoist-linked incidents recorded in 2016, as against 110 such incidents in 2015. A total of 163 such incidents were recorded in 2014. Similarly, there was a marginal spike in Maoists involved in attacking economic targets in 2016, with 10 such incidents, as compared to nine such attacks in 2015. A total of 31 such attacks were registered in 2014.

Disturbingly, out of the 38 Districts of the State, 22 Districts- Arwal, Aurangabad, Banka, Begusarai, Bhojpur, East Champaran, Gaya, Jamui, Jehanabad, Kaimur, Khagaria, Lakhisarai, Munger, Muzaffarpur, Nalanda, Nawada, Patna, Rohtas, Sitamarhi, Sheohar, Vaishali and West Champaran –are among the 35 worst LWE- affected Districts identified by the UMHA across the country. According to SATP, Maoist activities were recorded in at least 17 Districts in 2016 as against 22 in 2015.

On March 14, 2017, Kundan Krishnan, Inspector General (IG, Operations), Bihar Police, admitted that there were challenges in carrying out operations in some part of Munger, Lakhisarai and Chakarbandha in Gaya; south GT road in Aurangabad and Gaya Districts, besides Charkapathar and Narganjo in Jamui, owing to the difficult terrain in these areas. He added, “Maoist violence has certainly shown a declining trend in the State. But four Bihar districts along the Jharkhand border, known for their difficult topography, namely, Aurangabad, Gaya, Lakhisarai and Jamui-still have pockets of left-wing extremist (LWE) activity.”

Apart from CPI-Maoist, the TPC, also made its presence felt in the State. On January 3, 2016, TPC cadres assaulted two persons, identified as Ramvilas Ram and Ramdeep Ram in Aurangabad District. The fear of a TPC backlash is such that it forced the mukhiya (village head) Ramji Ram not to lodge a Police complaint even though the victims belonged to his family-70-year-old Ramvilas Ram (father) and Ramdeep Ram (brother). TPC cadres had demanded 20 per cent of the grant sanctioned by the Government for welfare schemes in Ramji’s panchayat (village level local self government institution). The March 1, 2017, killing (mentioned above) of a civilian in Rohtas District was the latest TPC-related incident.

Another, Maoist splinter, People’s Liberation Front of India (PLFI), which also operates out of Jharkhand, has been active in Bihar. Additional Director General of Police (ADG, Headquarters), Sunil Kumar, noted, on March 9, 2016, “Looking at the increasing activities of the PLFI, the officials of both the States [Bihar and Jharkhand] have decided to share information. Earlier, PLFI was more active in Jharkhand. So, their input will be valuable for us.”

Meanwhile, SFs arrested at least 104 LWEs in the State, including two ‘area commanders,’ two ‘zonal commanders’ and a ‘supreme commander’ of the Revolutionary Communist Centre (RCC), in addition to 153 arrests in 2015. Till March 19, 2017, another 11 LWEs had already been arrested in the current year.

SF personnel also recovered a huge amount of arms, ammunition and explosives in Bihar. On September 8, 2016, Police seized a huge consignment of explosives being smuggled from Jharkhand, in the Barachatti Police Station area in Gaya District. The recoveries included 10,350 detonators and 6,500 gelatin sticks. Further, on November 10, 2016, Police uncovered two mini gun factories and recovered a country-made revolver and a large number of arms-making hand-driven machines and barrels at Gorho village under Asarganj Police Station in Munger District.

Under the State’s new surrender policy of 2013, in which the Bihar Government provides financial assistance, including up to INR 250,000 to top leaders who surrender; INR 10,000 as immediate assistance and INR 3,000 per month for rehabilitation, as well as rewards for each weapon surrendered, the State recorded the surrender of 24 LWEs in 2016, in addition to seven surrenders in 2015.

Unfortunately, Bihar Police continues to lag in terms of capacities to deal with the evolving challenges created by the Maoists. According to the latest Bureau of Police Research and Development (BPR&D) data, Bihar has 90.68 Police personnel per 100,000 populations, as against a sanction of 119.17, as on January 1, 2016, the worst ratio in the country, and far below the national average of 137.11. The Police/Area Ratio (number of policemen per 100 square kilometers) is 99.61, as against the sanctioned strength of 130.92. The State was found to be lagging in construction of fortified Police Stations, with 40 out of the sanctioned 45 yet to be constructed. By comparison, in neighbouring Jharkhand, out of 73 sanctioned fortified Police Stations, only two were yet to be completed; in Odisha, out of 52 sanctioned fortified Police Stations, 18 remained to be constructed; and in West Bengal, out of 17 fortified Police Stations, just one was yet to be completed. Moreover, 36 of 1,064 Police Stations are without any wireless sets. These are only a sampling of the enveloping deficits that afflict Police capacities in the State.

Significantly, on January 31, 2017, A.R.K. Kini, the Union Secretary (Security) in the Cabinet Secretariat, expressed concern over Bihar Police’s failure to implement the Crime and Criminal Tracking Network and System (CCTNS) project, despite the Centre bearing the entire cost of the project. The Centre has already provided INR 250 million out of the total INR 680 million earmarked to the State for this project.

The persistent lack of political sagacity across successive regimes in addressing these issues and deficits has bolstered the Maoists in the State at a time when they are suffering major reverses across most other theatres in the country. The Maoists have demonstrated tremendous resilience in very trying circumstances in the past, and the failure to deal consistently and effectively with them will create opportunities for their consolidation once again, giving them a base in Bihar to engineer a recovery in other parts of the country as well. There is, quite simply, no room for a divergent State approach on this issue, at a time when a nationally coordinated strategy appears to be making significant gains.

India: Jammu And Kashmir Assessment 2017 – Analysis

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On March 5, 2017, two terrorists and a Policeman were killed and five Security Force (SF) personnel, including an Army Major, were injured during an encounter in the Tral area of Pulwama District. The slain terrorists were identified as Aqib Molvi of Tral and Umar from Pakistan.

On March 3, 2017, a civilian was killed and a Central Reserve Police Force (CRPF) trooper was injured when militants hurled a grenade targeting SFs deployed on law and order duties at Murran chowk at Pulwama town in Pulwama District.

On February 23, 2017, three Army troopers and a civilian were killed and four Army personnel, including two officers, were injured in an attack by terrorists at village Mulu Chitragam in Shopian District. An unnamed Police spokesman disclosed that a cordon and search operation was carried out at Kungnoo in Shopian by personnel of the 44-Rashtriya Rifles (RR) and Police in the night of February 22: “The cordon and search operation concluded without any arrest or recovery. While returning from Kungnoo, the party was attacked by unknown militants at Mulu Chitragam at about 2 am [February 23] resulting in injuries to six Army personnel including two officers of whom three succumbed to their injuries.” One woman, identified as Taja, “was hit by a stray bullet inside her house during the cross fire” and died later. Two militants were also injured in the retaliation by the SFs. According to reports, Hizb-ul-Mujahideen (HM) was involved in the attack.

On February 14, 2017, eight persons, including four Army personnel and four terrorists, were killed in two separate incidents. Sources indicated that, on a tip-off, SFs launched a joint search operation at Parray Mohalla Hajan in Bandipora District. As SFs were sealing off the area, terrorists hiding in the village opened fire on the troops and hurled hand grenades. SFs returned fire, leading to a gun battle, in which eight soldiers were injured. Three of the injured soldiers later succumbed to their injuries. One terrorist, identified as Abu Haris, an LeT ‘commander’, was killed during the encounter.

In another encounter during the day, three terrorists were killed and an Army officer was injured in the Handwara area of Kupwara District. The officer died later.

On February 12, 2017, eight persons, including four militants, two SF personnel and two civilians, were killed in the Frisal area of Kulgam District. Giving details, Brigadier R. Chakraborty disclosed, “At around 11.30 pm [February 11] we came to know from the police that four militants are hiding in Frisal village and some 4-5 suspected houses were immediately identified. Around 12 a.m., we cordoned off the houses where they were hiding. In the morning, we came to know that a civilian was also trapped inside the house along with the militants, which forced us to delay the operation for 4-5 hours. We would have otherwise finished the operation during the night… When we were moving in, the civilian saw us and started to run towards us but militants opened fire and killed the civilian. Two of our soldiers also lost their lives during the process…But soon after retrieving the bodies, we launched a final assault and killed all the four militants.” While two of the slain militants were from the LeT, two others belonged to the HM. In the meantime, people in the area came out on the streets as the encounter was in progress and pelted stones on SFs near the encounter site. SFs fired teargas and pellets in which around two dozen persons were injured. One of the injured persons, Mushtaq Ibrahim Itoo, succumbed to his injuries.

According to partial data compiled by the South Asia Terrorism Portal (SATP), at least 43 persons, including seven civilians, 10 SF personnel and 26 terrorists, were killed in militancy-related incidents during the first 64 days of the current year (data between January 1, 2017, and March 5, 2017). During the corresponding period of 2016, such fatalities stood at 31 (one civilian, seven SF personnel, and 23 militants).

Through 2016, Jammu and Kashmir (J&K) accounted for 267 terrorism related fatalities (14 civilians, 88 SF personnel, and 165 militants) as against 174 such fatalities (20 civilians, 41 SF personnel, and 113 militants) in 2015. The quantum jump in overall fatalities is indeed worrisome. Though SFs managed to maintain a positive kill ratio of 1:1.87 against the militants in 2016, this was much lower than the ratio of 1: 2.75 secured through 2015). The steep increase in SF fatalities is a major concern. More worryingly, the terrorists carried out repeated successful attacks on SF bases and camps through 2016, highlighting vulnerabilities and a measure of complacence in the security establishment. In the worst ever attack in terms of fatalities of Army personnel since 1988, at least 17 Army personnel were killed and another 19 were injured when terrorists stormed the administrative base of one of the units of the Indian Army near the Line of Control (LoC) in the Uri town of Baramulla District at around 5:30 am IST on September 18, 2016. Four terrorists involved in the attack were also killed. One of the injured soldiers died later.

The purported ‘paradigm shift’ in New Delhi’s policy towards cross-border terrorism, which resulted in the September 29, 2016, “surgical strikes” against terrorist launch pads in Pakistan occupied Kashmir (PoK), has failed to alter this trend. According to SATP data, at least 30 SF personnel have died in 16 incidents, including two suicide attacks on Army camps since the “surgical strikes” (data till March 5, 2017). In one such attack, on November 29, 2016, seven Army soldiers, including two Majors, and three terrorists, were killed in a suicide attack on a camp of the 166th Artillery Unit, just about three kilometers from the 16 Corps Headquarters, at Nagrota, in Jammu District.

More worryingly, stone-pelting by ‘civilians’ became a regular feature during encounters through 2016. There were also reports of large scale ‘public’ presence during the last rites of many of the terrorists killed during these encounters. Such incidents became more prominent after July 9, 2016, as J&K went through a protracted phase of street violence after the killing of HM ‘commander’ Burhan Wani in an encounter on July 8, 2016. According to official data provided by the State Government, at least 76 civilians and two Police personnel have been killed in street violence since July 9, 2016 (data till December 31, 2016). Though no official data about the number of civilians injured has been provided, varying media reports suggest that up to 10,000 protestors may have been injured in clashes with SFs. According to Government estimates “over 4,500 personnel of Police and Security Forces were also injured while safeguarding the life and property of the people.” At least 133 buildings, including Police Stations and schools, were damaged or set ablaze during the “law and order disturbances” in the Valley (between July 9, 2016, and December 31, 2016)

Based on these broad and disturbing developments, some of Kashmir ‘experts’ have made an attempt to portray that worsening security situation in the State as irreversible, claiming that the present trends represented a ‘revolt of the masses’. A former Union Home Minister went up to the extent declaring that “he had a sinking feeling that Kashmir was nearly lost for India”. These assumptions are utter and contra-factual nonsense.

First, a varying measure of ‘public support’ has always been there, but what is missed out is that large majorities reject the terrorist and separatist agenda, though these voices are inexorably silenced by the terrorist bomb and bullet. Further, analysis of category-wise fatalities data demonstrates that 2016 recorded the lowest number of civilian fatalities in the State since the commencement of Pakistan-sponsored terrorism in 1988. The previous low of 16 fatalities in this category was recorded in 2012. It is useful to note that fatalities in this category are perhaps the most significant index of the consolidation of peace in the State, which recorded a high of 1,333 civilian fatalities in 1996.

Moreover, though the present cycle has been the longest phase of street violence witnessed in the Valley, the 2010 street violence was much worse in terms of fatalities, with at least 101 persons killed and 4,288 persons, including SFs, injured. 46 persons were killed and 1,265, including SF personnel, were injured in the street violence of 2008. Furthermore, the magnitude of violence in 2016 started declining rapidly after the initial surge to alarming levels. On December 19, 2016, Director General of Police (Law and Order) Shesh Pal Vaid disclosed that a total of 2,380 ‘law and order incidents’ were reported during the ‘Kashmir unrest’, commencing July 8, 2016. Of these, at least 820 incidents were reported in July, which came down to 747 in August, 535 in September, 179 in October, 73 in November and just 25 during the first 19 days of December. According to SATP, there were another two incidents of street violence thereafter, in 2016. Since the beginning of the current year, at least 16 such incidents have been recorded.

It is useful to recall that, despite the unrest in 2010, the security situation in the following two years – 2011 and 2012 – improved significantly. The hanging of Parliament Attack accused Afzal Guru in 2013 and the subsequent unrest, though very limited, impacted adversely on the security situation in 2013 and 2014. Again, in 2015, the security situations improved. There is, thus, no permanent impact of the sporadic outbursts of unrest in Kashmir, and there is no sustainable ‘revolt of the masses’. Rather, these wider mobilizations are the outcome of focused strategies emerging from Islamabad, with street demonstrations orchestrated with the help of terrorist formations operating from Pakistani safe havens, and separatist proxies in J&K.

Indeed, on December 19, 2016, DGP (Law and Order) Shesh Pal Vaid had stated, “The unrest period is virtually over. Situation is returning to normal. The game plan of Pakistan to keep the pot boiling by fuelling unrest through its sponsored militants has been foiled by the Police.” Echoing a similar view, the then CRPF Director General (DG) K. Durga Prasad, stated on February 27, 2017, “The situation is not as naazuk (sensitive) as it was last year… The intensity with which it (stone pelting) happened is no longer there… The situation of stone pelting on security forces is not bad as earlier.”

The peace secured by SFs in Kashmir over the past years is irreversible. The Forces have the strength to overcome transient disturbances. The crisis remains within the political spectrum, with both the central and state Governments failing to conduct themselves in a manner that is expected of them. It is the absence of political sagacity and focus, and, indeed, periodic and intentional political mischief, that has produced the cyclical disturbances of the recent past, despite tremendous gains registered by SF action. Regrettably, there is no respite from petty-politicking – both by ruling and opposition parties. This remains the real challenge, and possibly insurmountable obstacle, to restoring Kashmir to an enduring peace.

How War On Terror Brought China And Africa Closer – OpEd

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By Bhaso Ndzendze*

The war on terror, perhaps like the Cold War in the latter half of the twentieth century, is a defining feature of the current age of international relations. As an effort to combat terrorism on an international scale, it was always perhaps bound to produce outcomes both intended and unintended. One of these, I argue, is the (enhanced) alienation of the US in Africa after 2001/2002; something which I argue in turn opened a vacuum which China quickly came to fill on the continent.

The triadic relationship between Africa, China and the United States has been affected by the US-led war on terrorism that was launched in the wake of the 9/11 attacks in New York. As a 2006 article in the Journal of Comparative Strategy put it, “while the countries of the greater Middle East have figured most prominently as theatres of operations in that conflict, other areas of the globe, including Africa, have likewise experienced a shift in U.S. patterns of engagement.”

A large part of the alienation of the US was due to the launch of the war on terror in the manner that it was; as a development which (re-)associated the US, from President George W. Bush onwards, with insulated (and sometimes questioned and unpopular) priorities, a disregard for international institutions and laws, an ill-received bellicosity against African states and historic African allies such as Palestine, who had been bound to the continent by the Afro-Arab Bandung Conference in the early 1950s, and above all, political “interference” and regime-change in places such as Iraq, Afghanistan, Libya, and attempts in Sudan and Syria – all factors which cemented its alienation and saw a vacuum that came to be filled by China who, while fighting its own war on terror in Tibet and Xinjiang, has averted playing it out on the international arena, has shunned interference and has thereby bolstered its soft power appeal among African countries.

The war on terror was from the outset very unpopular within the African continent. To begin with, only five African states joined in the so-called “coalition of the willing” which cooperated with the US in the invasion of Iraq in 2003. Many African leaders, including South African Presidents Thabo Mbeki and Nelson Mandela (the elderly statesman had said that President Bush “is now wanting to plunge the world into a holocaust” by invading Iraq and had planned a trip with the British billionaire, Richard Branson, to Iraq to negotiate with Saddam Hussein himself but could not do as the bombing began before he could) Zimbabwean President Mugabe, were quite opposed to the manner in which the war on terror took shape. There are perhaps two main causes of this opposition. Having come out of the Cold War just over a decade before, many African countries were once again placed under the threat of becoming proxies in a war that was not of their doing. The once more politicised international arena would lead to there being a moral drainage for the US-led effort. Furthermore, the war on terror, being concomitant with tied aid, once more brought into the realm of possibility the likelihood of being subjected to “conditions” in exchange for cooperation. To that effect, al-Shabaab, the Somali branch of al-Qaeda formed in 2006, gained much of its fame for its responsibility for the 2013 attack in Westgate Mall in Nairobi, Kenya in which 67 people were killed and 175 were injured by gunfire. The act was in vengeance for Kenyan deployment of its troops against the fundamentalist militia in Somalia a few weeks before; allegedly, Kenya had been coerced into doing so under the threat of taking away USAID on which that country is quite reliant. The war on terror has also undermined democratic forces on the continent as it has seen the US support and bolster undemocratic regimes in Djibouti, and poor human rights regimes such as Uganda.

Secondly, the war on terror cannot be divorced from the Palestine question, over which many African countries are opposed to what they perceive to be a suppression of Palestinians by the Israeli government, with US support. Going back to the famous Afro-Arab-Asian Bandung Conference of the early 1950s, many African countries still pledge solidarity to Palestine and see the “war on terror” as averting the real issue, the future of Palestine, which many “terrorists” have as their cause, and are thereby deemed “freedom fighters”, and these are therefore portrayed in much the same way as the anti-colonial independence fighters of Africa were during their own struggles against domination.

In the Pew Global Attitudes survey for 2015, African respondents had a significantly more positive view of China (70% with a favourable view) than respondents in other regions such as Europe (41%), Asia (57%), or Latin America (57%). This likely reflects the positive impact of China’s engagement on African growth. In Nigeria and Kenya, the two largest economies in their respective sub-regions, China attained 89 percent and 75 percent of respondents hold positive views of China, respectively.

China’s state owned enterprises, due to being able to take risks that entirely privately-owned US companies could never take, has been able to work with African countries in times when they are deemed liabilities due to the war on terror narrative. For example, China has shown both willingness and an ability to invest in Africa when the western financiers have been averse towards Africa; such was the case in Nigeria’s oil sector, as well as Sudan who upon being demarcated as a “terrorist sponsor” experienced substantial divesting by the US and the West at large.

At the core of Africa’s demands towards the investing world has been the principle of non-interference. In light of its previous experiences under the structural adjustment programmes that were introduced by the World Bank and the International Monetary Fund, Africa has sought to attract investors and development partners who, while investing heavily in its infrastructure, business and social projects, would also be willing to take a hands-off approach towards questions of governance, policy and the expenditure of the investments. The salience of this can perhaps be best demonstrated by the increasing unpopularity faced by the International Monetary Fund and the World Bank seen in Africa (and elsewhere). Against this backdrop, African countries have increasingly looked towards China as an alternative source of investment as well as aid due to its ostensible policy of non-interference in the domestic policies and politics of receptor states. The coinciding of the rise in Chinese investment in Africa with the launching of the war on terror by the US cannot be overlooked as a factor.

We cannot exclude the extent to which other factors have resulted in a pro-China stance within the African context. The Forum on China-Africa Cooperation, which was established in the year 2000 and has been a platform for channelling Chinese investment and aid onto the continent (including commitments to train African scientists, agriculturalist and for write-offs of debt for some of the poorest African states, and no less than $5-billion in aid pledged since 2009), could be one such alternative candidate explanation. As many scholars would argue, the Forum has been the engine through which Africa and China have been brought close together. Nevertheless, this explanation does not disprove the argument put forth in here and in fact it could be argued that it is concomitant with it as the Forum could be said to have provided a platform through which the surpassing of the US took place. In the end, Africa’s eastward turn may have not been caused by the US-led war on terror, but it can in the least be stated with fairness that it was a contributing factor in that regard. Indeed, the actions and decisions of states, institutions and other international actors tend to evolve gradually over time and not at once, exponentially or instantaneously.


Source: This article was published by Modern Diplomacy

Pakistan: Christian Leader Denied Medical Treatment

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A Pakistani Christian political party has condemned jail authorities for failing to shift their detained leader to hospital for proper medical treatment despite a court order.

Aslam Pervaiz Sahotra, head of Massiha Millat Party (Christian Nation Party) and Human Liberation Commission of Pakistan, is on trial for the killing of two men mistaken as militants by Christian protestors shortly after twin suicide attacks on Catholic churches in Lahore on March 15, 2015 .

“Anti-terrorism court judge Sajjad Ahmed ordered jail authorities to provide treatment to Aslam Pervaiz Sahotra at the last hearing on April 22,” Aftab Gill, Information Secretary of the Massiha Millat Party, told ucanews.com.

“We have submitted complete medical record to the court about the seriousness of Sahotra’s spinal issues. Our party’s head is having difficulty in sitting and walking,” he said.

Gill said that the jail’s medical team had said he needed two digital X-rays, but nothing was done by jail authorities.

“We strongly condemn the Kot Lakhpat Jail administration for denying Sahotra his right to medical care. We also demand that Sahotra be shifted to hospital without any further delay,” said Gill.

In the 2015 attacks, two suicide bombers blew themselves up at a Catholic church and a Protestant church after Sunday Mass in Youhanabad, a Christian neighborhood. At least 15 people were killed and 70 were wounded.

Following the blasts, enraged protesters formed a mob and killed two people suspected of involvement in the suicide attack. They were later identified as passers-by who had earlier been briefly detained as terror suspects by the police.

Sahotra was among dozens of Christians who were rounded up by the police after the riots and put on trial under terrorism clauses. Sahotra has pleaded innocence.


Weather Extremes And Trade Policies Main Drivers Of Wheat Price Peaks

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Price peaks of wheat on the world market are mainly caused by production shocks such as induced for example by droughts, researchers found.

These shocks get exacerbated by low storage levels as well as protective trade policies, the analysis of global data deriving from the US Department of Agriculture shows.

In contrast to widespread assumptions, neither speculation across stock or commodity markets nor land-use for biofuel production were decisive for annual wheat price changes in the past four decades. This finding allows for better risk assessment. Soaring global crop prices in some years can contribute to local food crises, and climate change from burning fossil fuels and emitting greenhouse gases is increasing weather variability.

“Food security to a large extent is a matter of prices, hence our interest in understanding what drives variations from one year to another,” said lead-author Jacob Schewe from the Potsdam Institute for Climate Impact Research (PIK).

When global wheat prices, along with those of other staple crops, skyrocketed in 2007/08 and again in 2010/11, poor people in many developing countries suffered from that – these temporary price rises have even been linked to food riots in several countries.

“These recent peaks, as others, have been preceded by severe droughts that reduced crop production. Now we can show that such weather-induced shocks have the potential to induce strong price increases,” said Schewe “Moreover, they can trigger protective trade policy responses, including hoarding or export bans, which further exacerbate the global effects of production shortfalls even though they may seem rational from a country’s point of view. This happened during the recent price peaks.”

Commodity speculation turns out to be just a minor factor for annual prices

“While cross-market speculation might further exacerbate the problem on monthly or shorter time-scales, the data indicate that in the end it was a minor factor for annual prices,” added co-author Christian Otto. This is despite the fact that the sudden price increase in 2007/08 coincides with speculation by index funds driven out of the collapsing US housing and stock markets.

The researchers developed and applied a rather simple computer simulation of wheat markets. By comparing the results to observation data from past years, the scientists checked that the computer simulations fit reality. Importantly, the factor of supply and demand from storage – also based on existing data from markets – is integrated in these calculations. The simulation model could be applied for assessments of future wheat price fluctuations under climate and land use changes.

“The good news: Our study helps to understand what can be done if we want to limit food price peaks in the future,” said Katja Frieler, co-author of the study and vice-chair of PIK’s research domain Climate Impacts and Vulnerabilities. “First, besides improving productivity experts can seek to carefully adjust trade policies as well as storage capacities. Second, stabilizing the climate by reducing greenhouse gas emissions is key if we want to limit the risks of weather extremes across the globe.”

Brazil: Anti-Austerity Strikes Cripple Nation

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Nationwide strikes led by Brazilian unions to protest President Michel Temer’s austerity measures crippled public transport in several major cities early on Friday, April 28 across this continent-sized nation, while factories, businesses and schools closed, according to Reuters.

In the economic hub of Sao Paulo, the main tourist draw Rio de Janeiro and several other metropolitan areas, protesters used barricades of burning tires and other materials to block highways and access to major airports.

Police clashed with demonstrators in several cities, blocking protesters from entering airports and firing tear gas in efforts to free roadways.

Many workers were expected to heed the call to strike for 24 hours starting just after midnight Friday, due in part to anger about progression this week of congressional bills to weaken labor regulations and efforts to change social security that would force many Brazilians to work years longer before drawing a pension. In addition, the strike will extend a holiday weekend ahead of Labor Day on Monday.

This will be Brazil’s first general strike in more than two decades if it gets widespread participation.

Authorities boarded up windows of government buildings in national capital Brasilia on Thursday, fearing violent clashes between demonstrators and police.

Demonstrations are expected in other major cities across the Latin American nation of more than 200 million people.

“It is going to be the biggest strike in the history of Brazil,” said Paulo Pereira da Silva, the president of trade union group Forca Sindical.

Violent protests have occurred repeatedly during the past four years amid political turmoil, Brazil’s worst recession on record, and corruption investigations that revealed stunning levels of graft among politicians.

Nearly a third of Temer’s cabinet and key congressional allies came under investigation in the scandal this month, and approval ratings for the president, who replaced Dilma Rousseff last year after her impeachment, have fallen even further.

Rousseff’s Workers Party grew out of the labor movement, and her allies have called her removal for breaking budget rules an illegitimate coup.

“Temer does not even want to negotiate,” said Vagner Freitas, national president of the Central Workers Union (CUT), Brazil’s biggest labor confederation, said in a statement. “He just wants to meet the demands of the businessmen who financed the coup precisely to end social security and legalize the exploitation of workers.”

Marcio de Freitas, a spokesman for Temer, rejected the union’s criticism, saying the government was working to undo the economic damage wrought under the Workers Party government, which had the backing of the CUT.

“The inheritance of that was 13 million unemployed,” he said. “The government is carrying out reforms to change this situation, to create jobs and economic growth.”

Dealing With Maoist Threats: Time Ripe For Political Dialogues – Analysis

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By Niranjan Sahoo

Chhattisgarh is back in the news again, albeit for the wrong reason. On April 24, some 300 heavily armed Maoist insurgents ambushed the convoys of Central Reserve Police Force (CRPF) in Chhattisgarh’s Sukma, leaving 25 para-military personnel dead and many grievously injured. The gruesome incident took place when a team of 100 CRPF personnel belonging to the 74th battalion was patrolling on the Dornapal-Jagargunda road to provide security for the construction of the road connecting south Bastar.

Sukma continues to be the graveyard for paramilitary forces. Only in last March this year, Maoists had gun down 12 CRPF men in Sukma’s Bhejji village. A little more than two years ago, rebels had brought heavy casualties to the forces when they killed 15 members of the CRPF patrol party near the same location. And, the site of this Monday’s attack is just few kilometers from Latehar, a place where Maoists had killed 76 CRPF personnel in 2010.

The reactions to Maoist related incidents in India have been anything but rational. The same bunch of analysts, who are dismissive of strategy to end insurgency, were celebrating the State’s success against Maoists when Andhra-Odisha security forces eliminated 24 hardened Maoists in October 2016. Many analysts and Maoist watchers even went to the extent of writing obituaries of Maoists and their ideologies. While this was one of the most successful counter-insurgency operations against Maoists in the recent times, which saw the elimination of Appa Rao, Secretary of Eastern Division, his wife Aruna and Gajarala Ashok, the military head of AOB zone, analysts were grossly under-evaluating the capacity of the rebels to fight back.

A series of attacks in the recent times, including the Monday Sukma attack, is a clear reminder that the Maoist insurgency is anything but history. Notwithstanding the considerable losses of cadres, top leaders, resources and control over vast geography, Maoists retain considerable firepower in their strongholds. The Sukma incidents are clear reminders of their disruptive strengths.

 Comparative statistics of Naxal violence (2005-2017)

Years Civilians Security Force Personnel LWE/ CPI-Maoists Total
2005 281 150 286 717
2006 266 128 343 737
2007 240 218 192 650
2008 220 214 214 648
2009 391 312 294 997
2010 626 277 277 1180
2011 275 128 199 602
2012 146 104 117 367
2013 159 111 151 421
2014 128 87 99 314
2015 93 57 101 251
2016 120 66 244 430
2017 (March) 10 1 44 23
Total* 2955 1853 2561 7369

Source: Ministry of Home Affairs, GoI, 2016-17

 Time for dialogues

This year marks 50 years of Naxalite/Maoist insurgency. In May 1967, poor farmers, landless labourers and tribals had taken lathis, arrows and bows and raided granaries of Zamidars at Naxalbari, a tri-junction village of India, Bangladesh (then East Pakistan) and Nepal in May 1967. The Naxalbari uprisings, which were quickly crushed by the police, however, spread its spark to other regions of the country. However, with the arrest of Charu Mazumdar, the movement’s key lynchpin, many thought the Naxalite movement was all over. However, the 1980s saw the revival of the movement in its most violent form. Kondapalli Seetharamaiah formed the People’s War Group (PWG) in 1980. This was followed by hundreds of violent incidents, including the sensational killings of many top politicians from Andhra Pradesh. When the PWG was decimated in the early 1990s, leading to Seetharamaiah’s arrest, many analysts concluded that it was the end of armed insurgency. However, the insurgency movement revived again in 2004 when 40 armed factions merged to form the Communist Party of India (Maoist).

To cut the long story short, despite state actions, the left-wing insurgency continues its appearance in some form or other ever since its formal birth in 1967. Comparatively, the Indian state is much more powerful today than it were in the 1970s and 1980s. Yet, it is unable to crush this insurgency, which continues to disrupt development and governance in a vast region, mostly inhabited by poor adivasis. Security operations or law and order approach have their limits. Both the Centre and the affected States need to ponder about their strategies and approaches in dealing with this form of insurgency that still continues to attract sizeable sections of population. While there is no substitute to law and order approach as the State is dealing with violent insurgents, at the same time, sincere efforts should be made to bring rebels to dialogues.

If the Columbia government can initiate dialogues and clinch a process accord with the FARC (Revolutionary Armed Forces of Colombia), world’s most violent left-wing insurgency that has left more than 220,000 people dead and 5.7 million displaced since 1964, why should the Indian state hesitate to hold dialogue with the rebels. In fact, Now, being very weak and with their back to the wall, Maoist rebels might be more willing to join in political dialogues than ever before. The Colombia government also could force the FARC to the negotiation table only after liquidating its top leaders and weakening their firepower. In short, time is ripe for some smart negotiations with Maoists now. Armed means alone cannot crush a revolutionary movement that draws its nourishment from underdevelopment, injustice, exclusion and lack of governance.

Kaliningrad: Baltic Hong Kong No Longer – Analysis

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By Sergey Sukhankin*

(FPRI) — Kaliningrad Oblast—the westernmost Russian region physically separated from the Russian mainland—is a unique case study in post-Soviet transformation. The post-1991 oblast had all of the elements necessary for a success story: proximity to Europe, a liberal governor, peace, relative stability, and absence of other negative factors. Many parts of the Russian Federation were not endowed with these qualities, but Kaliningrad was. Initially deemed a “bridge of cooperation,” the “Russian getaway to Europe,” and the “Baltic Hong Kong,” the exclave turned out to be one of the greatest disappointments that post-Soviet area has seen.

Not only did Kaliningrad fail to become a site of cooperation and dialogue between Russia and the European Union, it deteriorated into a “military bastion,” dependent on hand-outs from the central government. The Baltic Hong Kong became Russia’s Baltic Corregidor—a military base with the capability of cutting off other countries’ access to the Baltic Sea.  Moreover, the once hoped for cooperation with the West is being mercilessly destroyed through implementation of the “Russian World” project and the elimination of the region’s German historic-cultural legacy.

From Soviet “Military Bastion” to the “Russian Embarrassment” 

After it was annexed in 1945, Kaliningrad became a Soviet military outpost on the Baltic Sea. To keep it afloat, Moscow allocated enormous financial resources to prop up the local economy as a form of “compensation” for its adverse location. Kaliningrad elites quickly learned the lesson that they could extract resources from the central government for their own benefit.

Everything, however, changed in 1991 when the USSR collapsed. In addition to vast opportunities and great expectations, the post-Soviet world introduced a new challenging reality. Kaliningrad could have become Russia’s response to Hong Kong and serve a “bridge” between Europe and Russia. Yet, for Kaliningrad to take this path, local elites and the Kremlin needed a “road map” for the region’s development. Equally important, however, was the local population’s willingness to accept a new reality, in which competition is a pre-requisite for progress, prosperity, and success. Neither of these came to pass. Instead of prosperity and Europeanization, Kaliningrad became a Russian backwater region. Instead of being known for the birthplace of Kant and Bessel, the oblast was associated with an HIV/AIDS epidemic, smuggling, and widespread criminality.

“Stability for Tranquillity” or Everything Comes at a Price

Transition from a somewhat privileged Soviet city into a backwards region shocked the local population, and led them to welcome promises of stability, whatever the source. Vladimir Putin’s accession as president of the Russian Federation in 2000 had crucial and far-reaching implications for Kaliningrad. This shift became clear in 2005, during celebrations of 750th anniversary of Kaliningrad. From this point, Moscow identified its determination to choose the path of development for Kaliningrad: during elaborate anniversary celebrations, Georgy Boos, who had been handpicked by Putin, was presented as the next governor of the oblast. Similarly, the Kremlin suggested that legislation passed in 2006 giving Kaliningrad tax breaks as part of a Special Economic Zone (SEZ) was to become the backbone of the local economy.

Yet, it soon became clear that both changes were designed to increase dependence on Moscow. For instance, the new SEZ gave priority to big businesses, primarily from Moscow, restricting foreign companies’ access to the local market. Moreover, prioritizing large enterprises over small and medium size enterprises (SMEs) did not take into account the limited size of the local market and the lack of resources that were to be transported from the Russian mainland. In practice, this meant the local economy was to be artificially supported by financial subsidies from the central government. By refocusing Kaliningrad’s economy toward hand-outs from the central government, the Kremlin restarted policies that had been pursued by the Communist regime before 1991. The main outcome—skyrocketing corruption and further reliance on federal support—must have been expected by the Kremlin as an antidote against excessive independence and forging external contacts.

The Unsuccessful Revolt: Is Something Rotten in the Oblast of Kaliningrad?

This model functioned relatively well for several years before it first encountered serious challenges. The outbreak of the global economic crisis in 2008 showed how brittle and one-sided the Russian economy was. The federal centre could no longer provide the enclave with the same level of subsidies, urging the governor to raise funds from Kaliningrad itself. The local government increased taxes and levied utility charges on one of the most profitable local businesses, the transportation of vehicles from the European Union to Russia. At the same time, the government tolerated spending cuts on medical facilities. These tax increases and medical clinic closures inspired a wave of public discontent that broke into mass protests, eventually known as the “Tangerine Spring” in late 2009 – 2010. As a result, Georgy Boos was practically evicted from the oblast. Slogans, such as “United Russia go to Russia!” and “Down with Boos, down with Putin!” resonated far beyond the tiny enclave. The Kremlin watched these developments with a growing sense of alarm.

Influenced by events in the westernmost Russian region, many external and domestic observers rushed to celebrate the victory of Kaliningrad democracy, calling Kaliningrad the “Russian Gdansk,” a reference to the Polish city that led protests against that country’s communist rulers in 1989. Unfortunately, they celebrated too quickly. The locals revolted not because of values but because of their economic situation: the Kremlin was not providing the promised funding. The truth is that Kaliningrad could not have become Gdansk. Its Soviet legacy still shapes the outlook of a sizable part of the local community. The “Kaliningrad identity” is based solely on Soviet nostalgia.

Kaliningrad in the Vanguard of the “Russian World:” What is the End Game?

Another milestone occurred in 2008 when Patriarch Kirill became the head of the Russian Orthodox Church (ROC). As the Metropolitan of Smolensk and Kaliningrad, this powerful figure became the main advocate of Kaliningrad Oblast in Moscow. His accession had a profound effect on the “Russian World” project, with the church playing a larger role in Russian foreign policy. In this regard, Russia’s westernmost enclave was to acquire a new identity based on enormous transformation. No longer on the periphery, now Kaliningrad was described as the beacon and citadel of the “Russian World” in Europe. This new image was pronounced by the Patriarch in 2015 during his visit to Kaliningrad.

Patriarch Kirill I of Moscow. Photo by Serge Serebro, Vitebsk Popular News, Wikimedia Commons.
Patriarch Kirill I of Moscow. Photo by Serge Serebro, Vitebsk Popular News, Wikimedia Commons.

In the meantime, there were some disturbing aspects to this transformation. First, local authorities allied with the church launched another crusade against remnants of the German cultural legacy (which Kirill called “old stones,” referring to German churches). If this trend continues, soon, little will remain of Kaliningrad’s rich historical and cultural traditions from its German past. Second, Russian authorities keep trying to cut Kaliningrad’s links with the outside world. In addition to cancelling short-term visa free access for foreigners, the oldest local NGO “The German – Russian House,” which had opened in the early 1990s, was labelled a “foreign agent” and was forced to close. Third, various “patriotic” and paramilitary groups have gained popularity. These range from Cossacks to the notorious Yunarmia movement, an initiative of the Russian Ministry of Defence aimed at fostering a bond between the army and the young generations of Russians. Moscow is pursuing a policy of militarization of the public consciousness. Finally, Kaliningrad has become a mechanism by which Moscow generates anti-Baltic sentiments. An ugly incident in Vilnius, Lithuania at the end of 2016 when the Russian Embassy was implicated in dissemination of highly provocative anti-Lithuanian leaflets summoning the locals to move to Kaliningrad is a recent example.

Scenarios for Future Development

Growing disappointment with the new U.S. administration among Russian ruling elites, continuing sanctions, and worsening economic conditions will push Moscow to increase its anti-Western sentiment. Over the 26 years of post-Soviet development, Kaliningrad Oblast has worked as a litmus test of Russian relations with the West. For the oblast, the new anti-Western trend means greater isolation and further military build-up on its territory. In other words, Kaliningrad is returning to its pre-1991 status. In the meantime, in dealing with Kaliningrad today, Moscow is haunted by the same curse from 25 years ago: the absence of a strategy for economic development beyond distributing subsidies from the central government. The main proof—the abrogation of the Special Economic Zone status in April 2016 and the government’s failure to offer an alternative—showed that the old model does not work, and a new model does not exist.

Despite this situation, the Kremlin is determined to pursue its current course of dealing with the oblast, which is reflected in the growing military build-up. Therefore, the current model—economic support in exchange for loyalty—will continue to dominate Moscow’s relations with Kaliningrad.

About the author:
*Sergey Sukhankin
is an Associate Expert at the International Centre for Policy Studies (Kiev) and a Visiting Scholar at IBEI (Barcelona).

Source:
This article was published by FPRI.

Albania: Parliament Elects Meta As President

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With the support of the center-left majority, the speaker of Albania’s parliament, former premier Ilir Meta, was elected President of Albania on Friday amid an opposition boycott.

By Besar Likmeta

Ilir Meta, leader of Albania’s junior ruling party, the Socialist Movement for Integration, LSI, was voted in as President of Albania on Friday amid an opposition boycott.

Meta received 87 votes in favour and two against in the 140-seat assembly, becoming the seventh President of Albania since the Stalinist Communist regime collapsed in 1990.

He was elected head of state in the fourth round of voting, after Prime Minister Edi Rama and his Socialist Party put their weight behind his candidacy, which was announced on Thursday.

In the three previous rounds, the ruling majority had failed to nominate a candidate, in the hope that the centre-right opposition Democratic Party might be persuaded to end up its month-long boycott of parliament and participate in the proceedings.

Meta, 48, started his political career as a Socialist Party MP in 1992 at the age of 23 and has been continuously present in the assembly since then.

Between 1999 and 2002 he served as prime minister. In 2003, he split from the Socialists to form the Socialist Movement for Integration, which won 8.4 per cent of the votes in the 2005 election and five seats in parliament.

In the 2009 elections, the LSI won only 4.7 per cent of the vote and four seats. However, by allying with the Democratic Party from the opposite end of the political spectrum it became a kingmaker in the new coalition government in which Meta served as foreign minister and deputy premier.

Meta’s cooperation with Democrats ended in April 2013 when he switched sides to join Rama’s Socialists ahead of the June 2013 election, which they won by a landslide. Following the election, he was elected speaker of parliament.

Meta’s long career in politics has been dotted with allegations of corruption, abuse of power and voter fraud. In 2011, he was indicted on corruption charges after he appeared in a secretly filmed video, apparently discussing bribes with former economy minister Dritan Prifti.

The publication of the video led to anti-government riots in Tirana on January 21 2011. Four people were then killed after the Republican Guard opened fire on the demonstrators.

However, the Supreme Court early in 2012 cleared Meta of all the charges, citing a lack of evidence and declaring the video had been tampered with.

In 2015, a BIRN investigation alleged he was one of the Albanian officials believed to have benefitted in bribes from the debt collection firm Debt Advisory International, whose owner, Kastriot Ismailaj, is currently on trial for fraud.

Meta has always denied wrong doing and has maintained the accusations have been political in nature.

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